ASSET ALLOCATION WORKSHOP · This presentation is prepared for FINWITZ 2017 by LR Global Bangladesh Asset Management Company. Any kind of usage without permission is strictly prohibited

ASSET ALLOCATION WORKSHOPNovember 17, 2017

This presentation is prepared for FINWITZ 2017 by LR Global Bangladesh Asset Management Company. Any kind of usage without permission is strictly prohibited.

Copyright©2017 LR Global Bangladesh Asset Management Company. All rights reserved

ASSET ALLOCATION WORKSHOP

Warren Buffet Peter Thiel

This presentation is prepared for FINWITZ 2017 by LR Global Bangladesh Asset Management Company. Any kind of usage without permission is strictly prohibited.


Asset Management Industry

Global Asset Under Management

USD 63.9 Trillion

Indian Asset Under Management

USD 334.8 Billion

Bangladesh Asset Under Management

USD 895 Million

Expected Grow Rate 6%

USD 100 Trillion by 2020

Fundamental shift to low-cost funds

• In 1998, AIMS, the first AMC, started

• Took 10 years to launch a second

one, LR Global Bangladesh

• AUM increased by five times since

2010, despite the crash

30%

This presentation is prepared for FINWITZ 2017 by LR Global Bangladesh Asset Management Company. Any kind of usage without permission

is strictly prohibited.


About LR Global Bangladesh

Asset Under Management

BDT 1,127 Crore

OUR TEAM50 Years of Cumulative Experience

100% from Top Business Schools

2008 2010First Mutual FundInception

What We DoManaging institutional

investors’ money

Objective is to earn superior

risk-adjusted return on a

consistent basis

Across six Mutual Funds since

2009

Our Moto: NEVER LOSE YOUR

INVESTOR’S MONEY




A Tale of Two Stocks

BDT 207.31 January, 2009

BDT 3,297.916 November, 2017

CAGR 49.4%In Last 9 Years

BDT 1.0 Crore invested in BATBC in 2009 would have become

BDT 25.0 Crore

0

5000

10000

15000

20000

25000

30000

30

-12

-08

30

-03

-09

30

-06

-09

30

-09

-09

31

-12

-09

31

-03

-10

30

-06

-10

30

-09

-10

31

-12

-10

31

-03

-11

30

-06

-11

30

-09

-11

31

-12

-11

31

-03

-12

30

-06

-12

30

-09

-12

31

-12

-12

31

-03

-13

30

-06

-13

30

-09

-13

31

-12

-13

31

-03

-14

30

-06

-14

30

-09

-14

31

-12

-14

31

-03

-15

30

-06

-15

30

-09

-15

31

-12

-15

31

-03

-16

30

-06

-16

30

-09

-16

31

-12

-16

31

-03

-17

30

-06

-17

30

-09

-17

British American Tobacco Bangladesh Company Limited

24,885.8




A Tale of Two Stocks

BDT 1,105.530 December, 2008

BDT 11.616 November, 2017

After Adjustment

CAGR (3.5%)In Last 9 Years

Since its Peak in 5 December, 2010, Prime Finance Lost 91.3% of its

Market Cap

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

30

-12

-08

30

-03

-09

30

-06

-09

30

-09

-09

31

-12

-09

31

-03

-10

30

-06

-10

30

-09

-10

31

-12

-10

31

-03

-11

30

-06

-11

30

-09

-11

31

-12

-11

31

-03

-12

30

-06

-12

30

-09

-12

31

-12

-12

31

-03

-13

30

-06

-13

30

-09

-13

31

-12

-13

31

-03

-14

30

-06

-14

30

-09

-14

31

-12

-14

31

-03

-15

30

-06

-15

30

-09

-15

31

-12

-15

31

-03

-16

30

-06

-16

30

-09

-16

31

-12

-16

31

-03

-17

30

-06

-17

30

-09

-17

Prime Finance & Investment Ltd.

750.7




Performance of LR Global Bangladesh

140

81

25

50

75

100

125

150

Jan-11 Apr-12 Jul-13 Oct-14 Jan-16 Apr-17

LR_AIBL1STMF

AIBL 1ST ISLAMIC MUTUAL FUND DBH FIRST MUTUAL FUND

164

115

20

45

70

95

120

145

170

195

Feb-10 Oct-11 Jun-13 Feb-15 Oct-16

GREEN DELTA MUTUAL FUND

133

91

20

45

70

95

120

145

Sep-10 Jan-12 May-13 Sep-14 Jan-16 May-17

LR_GREENDELMF

MBL 1ST MUTUAL FUND NCCBL MUTUAL FUND-1LR GLOBAL BANGLADESH MF ONE

157

105

50

75

100

125

150

175

Sep-11 Dec-12 Mar-14 Jun-15 Sep-16

LR_LRGLOBMF1 146

88

25

50

75

100

125

150

Feb-11 May-12 Aug-13 Nov-14 Feb-16 May-17

LR_MBL1STMF

155

131

50

75

100

125

150

175

May-12 May-13 May-14 May-15 May-16 May-17

LR_NCCBLMF1

LR_DBH1STMF




Our Performance

Performance Statistics

(From Feb, 2010 to Sep, 2017)

So, What is our secret sauce?

LR Funds Benchmark

Annualized Return (ɼ) 8.1% 1.9%

Annualized Std. Deviation (Ϭ) 11.7% 22.7%

Return Per Unit of Risk (ɼ/Ϭ) 0.69 0.08

Alpha (α) 4.8%

Beta (β) 0.46

Performance Attribution Analysis: Alpha (α) Drivers

Asset Allocation 67%

Security Selection 33%




4 StepsDeciding which ASSET CLASSES

to include and which to exclude

Strategically altering the

weights to capture excess

returns, aka MARKET TIMING

Deciding WEIGHTS for each of

the asset classes allowed

SECURITY SELECTION

Investment

Policy

Investment

Strategy

How to Design A Portfolio







The Importance of Asset Allocation

Asset Allocation

67%Security Selection

33%4.8%Alpha Generated

93.6% of Return Variations

Come from Asset AllocationDeterminants of Portfolio Performance*

* Determinants of Portfolio Performance was a seminal research by Gary P. Brinson, L. Randolph Hood and Gilbert L. Beebower published in 1995,

one of the first works that academically analyzed performance of portfolio managers of mutual funds during 1985-94 period




Asset Allocation of LR Global Bangladesh

Active Management and Asset Allocation

Asset Size BDT 1,048 Crore

(From Feb, 2010 to Sep, 2017)

Since Inception, Our Material Outperformance Enabled Funds to Disburse Cash Dividend to

Unit Holders Even in Down-Markets

0%

25%

50%

75%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2017

21.4%

5.5%11.7%

13.3%

1.3%11.0%

0.0%

3.2%

21.0%

11.6% Banks &

FI

Cash




Takeaway

Documents

ASSET ALLOCATION WORKSHOP · This presentation is prepared for FINWITZ 2017 by LR Global Bangladesh Asset Management Company. Any kind of usage without permission is strictly prohibited