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DSP BlackRock Mutual Fund World Energy Fund!
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DSP BlackRock World Energy Fund
FOR PROFESSIONAL INTERMEDIARIES ONLY
April 2011
2
USD 6.9 billion
Indian Investors
DSP BlackRock World Energy Fund
BlackRock Global Funds (BGF)World Energy Fund
USD 2.9 billion
50-100%Allocation
0-30%Allocation
BlackRock Global Funds (BGF)New Energy Fund
Source: BlackRock; AUM of BGF funds as on March 31, 2011
3
Our energy expertise – we manage two different types of energy funds
(1) BGF World Energy – investing globally in traditional energy companies of all sizes.
(2) BGF New Energy – investing globally in alternative energy companies of any size.
4
BGF World Energy: Agenda
1. The Macro Backdrop: Oil and natural gas price outlook2. The Opportunity: Why now is an interesting time for the energy sector3. Our Approach: Positioning the BGF World Energy Fund4. Fund Statistics
5
(1) The Macro: Witnessing a structural change in energy demand
Sources: BP Statistical Review. **International Energy Agency World Energy Outlook, November 2010. New Policies Scenario (NPS).
Change in daily oil demand by region (mb/d)**
-4 -2 0 2 4 6 8
China
India
Middle East
Other Asia
Latin America
Africa
E.Europe
OECD Europe
OECD Pacific
OECD North America
mb/d
Non-OECD countries are the drivers of long term oil demand growth
Development of OECD/non-OECD energy demand*
6
The Macro: The global economic recovery is increasing oil demand today
Source: IEA February 2011,
Robust demand growth across all regions (Δmb/d)
Source: BlackRock, IMF Jan 2011.
% Change in global GDP (QoQ, annualised)
-3
-2
-1
0
1
2
3
4
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
mb/
d
OECD Non-OECD World
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
2007 2008 2009 2010 2011E 2012E
% c
hang
e (Q
oQ, a
nnua
lised
)
Oil demand is now robust across all regions
7
Japan: Potential demand impact
Impact of 2007 nuclear outage on fuel oil demand Impact of 2007 nuclear outage on crude demand
• Japan represents ~5% of global oil demand. Since 2005, total oil demand has fallen every year
• 11 reactors representing 9.7GW of capacity are offline. 8.5 GW of oil, gas and coal capacity is also shut in
• Following an earthquake in 2007, one 8.2 GW of nuclear capacity was offline for 21 months and fuel oil and direct crude burning rose by ~250,000 b/d• There is sufficient oil fired power capacity to make up nuclear shortfall. This could add 200,000 b/d to incremental oil demand.
• All things being equal this would increase 2011 world oil demand growth to ~1.9% from 1.6%• However, Some of the power requirement also likely to be met by LNG & coal (although utilisation rates at gas fired power plants are currently high)
Source: IEA, March 2011 & BP Statistical Review
8
The Macro: Oil supply growth has not kept pace – spare capacity is set to fall
OPEC Spare Capacity as a % of World Oil Demand
Source: IEA/Wood Mackenzie Source: Blackrock/IEA/Estimates range of ultimate spare capacity using bank analysts
World Oil Supply Growth by Region (mb/d)
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
E20
12E
2013
E
Analyst Range of Forecasts
*-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
2009 2010 2011 2012 2013 2014 2015
mb/
d
Non-OPEC crude capacity growth Global Biofuels GrowthOPEC NGLs Growth OPEC Growth (ex Biofuels)Total Net Change Total ex-Libya growth
2011E Demand Growth
OPEC spare capacity has peaked
9
Libyan Oil market analysis
Pre-crisis production profile by basin
Pre-crisis planned capex by company
Country Sustained Production
Capacity (mb/d)
Current supply (%
global production)
Spare Capacity (%
global production)
Algeria1.31
1.4%0.0%
Iran3.70 4.1% 0.0%
Iraq 2.75 3.0% 0.1%
Kuwait 2.55 2.7% 0.2%
Libya 1.80 1.6% 0.5%
Qatar 1.00 0.9% 0.2%
Saudi 12.10 10.0% 3.6%
UAE 2.70 2.8% 0.3%
Source: IEA March 2011, Wood Mackenzie
10
Potential for long-term supply impact: lessons from history
Iran
Russia
Iraq
Venezuela
0
500
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1975
1977
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2005
2007
2009
'000 bbl/day
Iraq oil production
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1970
1972
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'000 bbl/day
Venezuela oil production
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'000 bbl/day
Russia oil production
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1970
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2008
'000 bbl/day
Iran oil production
Iranian Revolution
Start of Iran/Iraq war
Gulf War I
Gulf War II
Oil industry nationalised
Chavez presidency begins
Collapse of the Soviet Union
Source: BP Statistical Review 2010
11
The Macro: Impact of higher oil prices on demand
Sources: BlackRock, BOAML. *Price is for Brent Crude.
• Price acts as the balancing mechanism between supply & demand
• Over the medium term, demand is highly inelastic. The majority of oil demand is from the transportation sector. There are limited alternatives – 98% of the world’s transportation uses fuels derived from oil.
• Oil demand growth is largely being driven by China and the Middle East which subsidise or control fuel prices. Demand in these regions is less impacted by higher oil prices but it is painful for governments.
• In the US, low natural gas prices are cushioning the impact of rising oil prices, as is rising GDP
• Energy consumption as a proportion of World GDP reached as high as 12% in mid-2008 yet demand remained relatively inelastic. Currently at 7.9%.
• Some economists cite that a $10 change in oil prices impacts global GDP by 25-50bps.
• The environment today is very different from the “energy crisis” of the 70s:
• Gradual demand led price rises rather than sudden supply shock?
• Low interest rates, weak USD make oil more affordable
Global energy consumption as a % of GDP
12
The Macro: US Natural Gas markets experiencing a structural change in supply
1. Producers need to reduce investment 2. Wall Street/JV partners have to stop funding capital expenditure programs3. Hedging needs to roll off and/or futures curve flattens so that there is less
incentive to drill4. Rig count needs to fall5. Increased demand for natural gas due to coal to gas switching6. Government policy change/LNG export
US Natural gas break even by basin for a 15% return ($/Mcf)A huge unconventional gas resource
0
1
2
3
4
5
6
7
8
Gra
nate
Was
h - L
iqui
ds ri
ch
Eag
le F
ord
- Liqui
ds ri
ch
Mar
cellu
s - S
W liqu
ids
rich
Can
a W
oodf
ord
Mar
cellu
s SW
Pin
edal
e
Hor
n Riv
er
Eag
le F
ord
- dry
gas
Mar
cellu
s - N
E
Bar
nett
- cor
e
Bar
nett
- S li
quid
s ric
h
Hur
on
Woo
dfor
d - A
rkom
a
Hay
nesv
ille
- cor
e
Faye
ttevi
lle
Bar
nett
Pic
eanc
e
Gra
nate
Was
h - h
oriz
enta
l
Hay
nesv
ille/
Bos
sier
Cot
ton
Val
ley
- hor
izen
tal
Pow
der R
iver
CBM
Cot
ton
Valle
y Ver
tical
Source: US DOE/CS using oil credit/BlackRock.
What would make us more constructive on US natural gas? Outside the US, gas prices are more robust
0
2
4
6
8
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Sep-07 Sep-08 Sep-09 Sep-10
$/M
MBtu
US UK Japan LNG
Henry Hub gas price
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80
120
160
Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10
Reb
ased
to 1
00
Gold SilverCopper TinCrude Oil MSCI World Energy IndexAgricultural ETF MSCI Metals and Mining
(2) The Opportunity: Oil price
Source: DataStream/Internal December 2010. * Morgan Stanley/Credit Suisse/BOAML Estimates
Oil & Energy Equities lagged other commodities in 2010
Source: DataStream 14 February 2011
40
50
60
70
80
90
100
110
120
2004 2005 2006 2007 2008 2009 2010 2011 2012
Historic average BRENT Forward curve Consensus
Analysts’ Oil Price Expectations vs. the Forward Curve
Oil price has lagged other commodities
14
The Opportunity: Valuation
Source: BlackRock, Bloomberg* as at 5th April 2011.
10x
15x
20x
25x
30x
Apr
-91
Apr
-94
Apr
-97
Apr
-00
Apr
-03
Apr
-06
Apr
-09
P/E
ratio
Price of DataStream Oil Shares Index divided by average real earnings over previous 10 years
Market does not appreciate the sector’s earnings potential
15
(3) Our Approach: Portfolio Positioning – focus on E&P
As the energy cycle reset in 2008 and rebounded in 2009, we changed the shape of the portfolio:
• Increased the oil price sensitivity within the integrated oil company category e.g. Suncor over Exxon
• Invested further in the Exploration & Production and the Oil Service subsectors
• Current positioning focuses on conviction plays with growth catalysts e.g. ~3% in pre-IPO companies
Source: BlackRock, as at end March 2011. subject to change.
0%
10%
20%
30%
40%
50%
60%
Integrated Oil Exploration &Production
Oil Services Refining &Marketing
Coal &Uranium
Distribution Cash
Jun-09 Mar-11 MSCI World Energy Mar 11
Evolution of sub-sector allocation within BGF World Energy Fund
16
Our Approach: Stock examples
Source: Marathon, Halliburton Corp, Barclays CapitalReference to the company names mentioned in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of that company.* From Halliburton analyst day slides, number is 2010 Sep YTD ROCE
Oil Services: US strong, international set to improveHalliburton• Oil service companies profit from increased spending by majors, national oil
companies and independent exploration and production companies• Global capex expected in increase 11% in 2011 to ~$490 billion• Currently benefiting from spending on US shales which are very service intensive.
In 2005 N. American Revenue/Rig ~$600/rig, now around $1,200/rig• Potential for significant margin improvement in the international business driven by
expanded market position, mix and supply chain management
Value opportunities with catalysts that could lead to a re-ratingMarathon
• Integrated oil company that plans to break up to create a stand alone upstream company and a refining & marketing company
• ConocoPhillips, Tesoro and arguably BP and Rowan have shown that oil companies can have higher break up values than their market valuations
• Competitive US refining assets that are currently benefiting from improved US product demand and discounted crudes
• Low growth but high ROCE upstream business compared with peers
17
(4) The Stats: BGF World Energy Fund - Top 10 holdings
Company Sector Country Assets % of Fund
Anadarko Exploration & Production USA USA 4.9
Schlumberger Oil Services USA Global 4.2
National Oilwell Varco Oil Services US Global 3.6
Cairn Energy* Exploration & Production UK Global 3.2
Talisman Energy Exploration & Production Canada Global 3.2
BG Group Integrated Oil UK Global 3.0
Halliburton Oil Services USA Global 3.0
Suncor Energy Integrated Oil Canada Canada 3.0
Occidental Integrated Oil USA Global 2.8
Marathon Integrated USA USA 2.8
Total 33.7%
Source: Holdings data as end March 2011, subject to change. * Combined Cairn Energy and Cairn IndiaBGF World Energy Fund is the abbreviated name of BlackRock Global Funds – World Energy Fund
Total number of holdings: 77 Number of unquoted holdings: 5
18
The Stats: Biggest Overweight/Underweight Portfolio Positions
Overweight Holding
Fund MSCI World Energy
Active Position
Anadarko 4.9 1.3 3.6%
National Oilwell Varco
3.6 1.1 2.5%
Talisman Energy 3.2 0.8 2.4%
Cash 2.4 0.0 2.4%
Green Dragon Gas 2.2 0.0 2.2%
Technip 2.5 0.3 2.2%
Lukoil 2.0 0.0 2.0%
Newfield Exploration
2.3 0.3 2.0%
Noble Energy 2.4 0.6 1.8%
Niko Resources 1.9 0.1 1.8%
Underweight Holding
Fund MSCI World Energy
Active Position
Exxon Mobil 2.1 14.0 -11.9%
RD Shell 1.4 7.5 -6.1%
Chevron 2.0 7.1 -5.1%
Total 0.0 4.2 -4.2%
BP 1.9 4.5 -2.6%
ENI 0.0 2.1 -2.1%
Conocophilips 2.5 3.7 -1.2%
Statoil Asia 0.0 1.0 -1.0%
Woodside Petroleum 0.0 1.0 -1.0%
Transcanda Corp 0.0 0.9 -0.9%
Source: BlackRock as at end March 2011. Indicative of portfolio only. Subject to change
19
The Stats: BGF World Energy - Geographical exposure
Source: BlackRock as at end March 2011. Indicative of portfolio only. Subject to change
Geographical Exposure by Listing Geographical Exposure by Risk Region
USA55%
UK16%
Canada18%
Cash2%
Australasia1%
Latin America1%
Europe Ex UK5%
Asia1%
China1%
World45%
USA17%
Canada15%
Australasia1% Cash
2%
Europe3%
Africa4%
Latin America2%
Asia 11%
20
100
150
200
250
300
350
Mar
-04
Sep
-04
Mar
-05
Sep
-05
Mar
-06
Sep
-06
Mar
-07
Sep
-07
Mar
-08
Sep
-08
Mar
-09
Sep
-09
Mar
-10
Sep
-10
Per
cent
BGF World Energy 7yr performance MSCI World Energy (TR)
The Stats: BGF World Energy: Performance
• Launched in 2001 as successor to Energy International
• Fund Managers: Robin Batchelor/ Poppy Allonby
• AUM of approx $ 6.9 bn
• Open-ended SICAV
• 50 – 80 holdings
• AA rated – S&P Fund Research
• AA rated – OBSR
• Superior rated - Morningstar
• Benchmark – MSCI World Energy Index (Total Return)
Source: Datastream. *Performance shown net to 31st March 2011
US$ (net of fees) YTD* 2010 2009 2008 2007 2006 2005 2004 2003 2002
BGF World Energy Fund 12.1 16.8 36.3 -46.4 40.2 8.1 49.5 36.6 29.5 -4.8
MSCI World Energy Index (total return) 13.8 9.5 22.9 -39.4 27.5 15.8 26.2 25.3 22.9 -8.4
Source: DataStream, data to 30th March 2011
21
Global Energy Conclusions
• Following a downturn due to the Global Financial Crisis, we are now in the upward stage of the next energy cycle
• The major headwinds facing the energy sector in 2009/2010 have gone away or are receding:
– oil demand is now robust across all regions
– OPEC spare capacity has peaked and is falling
• US Natural gas prices will remain subdued in the near term but European and Asian gas markets are attractive
• The energy sector has lagged the recovery of other commodities and equity valuations are attractive
• This is a supportive stock-picking environment
• BlackRock’s energy funds are managed by a well resourced and dedicated investment team
22
BGF New Energy: Agenda
1. Macro tailwinds2. End market improvement3. Our Approach: Positioning the BGF New Energy Fund4. Fund Statistics
23
Macro tailwinds – The return of $100+ oil prices
• Unrest in the MENA region has exacerbated an already tightening oil market, helping drive oil prices above $100/bbl
• Disruption of both oil (Libya accounts for 1.7% of global supply) and gas supplies has renewed energy security concerns in many countries
• Historical relationship between oil prices and New Energy equities has broken down. Is there potential for it to re-couple?
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Brent Crude BGF New Energy
Will oil prices and New Energy re-couple?Energy security – a rebel guard outside a Libyan refinery
Source: The Guardian Source: DataStream, to 31st March 2011
A triple digit oil price moves energy security up the political agenda
24
Macro tailwinds – Japan and the outlook for the nuclear industry
• Nuclear accounts for 14% of world electricity generation. In North America and Western Europe it contributes 20% and 26%, respectively. Over 25% of the world’s nuclear facilities were built before 1980.
• Life extension and expansion plans are already being reviewed:
• Germany has shut 7GW of nuclear capacity built pre 1980 for a safety review. This represents ~8% of their generation capacity.
• China has temporarily suspended approval of new nuclear power plants. 2020 target is for 80-90GW vs. 10GW current capacity.
• The US Nuclear Regulatory Commission is conducting a safety review of the fleet. ~20GW of capacity is currently awaiting life extension approvals.
Source: Exxon, CLSA, IAEA, Bank of America Merril Lynch, BlackRock
Global nuclear power additions
At risk of early
retirement
At risk of cancelation/
delay
MW
0
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1960 -1970
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Outlook for Central European reserve margins
-5%0%5%
10%15%20%25%30%
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Without nuclear life ex tensions With nuclear life ex tensions
Any delay (or reversal) of nuclear expansion will benefit renewables and energy efficiency
25
Regulatory support – The start of renewed momentum?
Low targets, goals dropped: Copenhagen ends in failure
US energy bill stalls despite spill
Spain renewables industry fears subsidy cuts
Climate Bill R.I.P
2009/10 2011
Nuclear jitters brighten solar industry’s path
80% of US Energy to be made from clean energy by 2035
Oil hungry China needs energy security rethink
European ministers call for bolder climate
emissions cut
26
Regulatory support – China is leading the way
New Energy is helping to solve China’s energy challenge• China has accounted for 64% of incremental world energy
consumption and 71% of energy-related carbon emissions since 2000
• China’s share of world primary energy consumption has grown from 10% in 1998 to over 20% today
• China is adding a power grid the size of France every single year
12th Five Year Plan (2011-15)• 15% of primary energy from New Energy by 2020 (150GW in
wind, 20GW in solar)
• Reduce energy intensity by 16% and carbon intensity by 17%
• Announced seven ‘Strategic Emerging Industries’ (SEI), of which five relate to New Energy
• Target is for SEIs to increase their share from 3% of GDP in 2009 to 8% in 2015 and 15% in 2020
• State Grid to invest $2.1 billion over next 5 years to support EVs. $60 billion to be invested in the ‘smart grid’ by 2020
China
China
China’s thirst for energy
China will be a major growth market for renewables, energy infrastructure and energy efficiency
Source: BP Statistical Review of World Energy, 2010. * Primary energy includes electricity generation, transportation fuel and heating
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2500.0
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China primary energy consumption* China as a % of World
27
Developed markets continue to recover from the financial crisis
3,600
3,650
3,700
3,750
3,800
3,850
3,900
3,950
4,000
Jan
05
Jan
06
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Jan
08
Jan
09
Jan
10
Billion kWh/yr
US Electricity Demand
Peak
Source: Thomson Financial DataStream, rolling 12 week average prices, as at 25th March 2011
Wholesale Electricity Prices
0
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Jan-
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Jan-
11
US$/MWh
US (PJM base) Spain (base) Germany (1-yr forward)
Peak
Source: EIA, rolling 12 month net electricity generation, as at December 2010
• Most of the companies in the new energy sector focus on ‘clean’ sources of electricity generation or ways to reduce electricity consumption. Consequently, electricity demand levels and prices are important.
• The Global Financial Crisis propagated the biggest fall off in energy demand since World War II
• Whilst still below peak levels, electricity demand and prices in developed markets are trending back up
Developed markets are recovering
28
Today’s cost of producing electricity (with no CO2 cost)
Subsidy independent – The increasing cost competitiveness of New Energy
• Continual research and development has increased the size and efficiency of wind turbines
• Cost of wind power has fallen dramatically:
– 1980: >40 ¢ per kWh– 2011: <8 ¢ per kWh
Source: EIA, Vestas, Barclays Capital
Falling cost of renewable power
Clean sources of power generation are economic
29
Innovation and advances – Energy efficiency
• Approximately 40% of the world’s energy is consumed by buildings, making them the largest target for energy efficiency
• LEDs are now on the cusp of mass market adoption as a viable alternative to traditional lighting
Source: Philips Color Kinetics & DOE, Freedonia
Commercial building energy use LED costs ($/klm)
Energy efficiency offers quick paybacks and is typically not dependent on subsidiesSource: DOE - Buildings Energy Data Book
HVAC31%
Lighting25%
Electrical components
12%
Cooking2%
Other20%
Refrigeration4%
Water heating6%
30
BGF New Energy Fund
Energy EfficiencyEnergy Generation
Renewable Energy, 36%
Alternative Fuels, 19%
Automotive & On-site Power, 1%
Enabling Energy Technology, 28%
Materials Technology, 11%
Energy Storage, 0.2%
As at end March 2011 Source HSBC
Sector growing from an annual market of $0.74 Trillion to $2.2 Trillion in next ten years
31
Portfolio positioning
• A portfolio of high quality companies:
– predominantly earnings positive/commercial sales bias/strong balance sheet/attractively valued
• Continued exposure to government-mandated growth
• Limited exposure to loss making companies with unproven technology (>90% net income positive)
• Over 50% of companies have market caps above $5bn
Source: BlackRock, as at end March 2011.
Evolution of sub-sector allocation within BGF New Energy Fund
0%
10%
20%
30%
40%
50%
60%
RenewableEnergy
EnablingEnergy
Technology
AlternativeFuels
MaterialsTechnology
Automotive/On Site
Generation
EnergyStorage
Cash
Dec-09 Mar-11
32
What we like…
• Building efficiency• Demand response• Power grid investment• Smart meters• e.g. Johnson Controls,
Schneider Electric
Energy efficiency• Vehicle emission standards continue to
tighten globally creating demand for emission reduction technologies, alternative power trains and cleaner fuels
• 2G cellulosic biofuels are expected to reduce CO2 emissions by ~90% and be cost competitive
• e.g. Johnson Matthey, Novozymes
• Since 2000, China has accounted for almost 2/3rds of world incremental energy consumption
• The 12th five year plan should be supportive to the sector with focus on both renewable energy and energy efficiency
China
Automotive emission reduction
• A reduction in risk appetite coupled with lower earnings visibility has led to a de-rating of renewable energy stocks.
• Selective opportunities exist to pick-up high quality assets at historically attractive valuations
Value opportunities
Source: Itron, Echelon, Novozymes
33
Value opportunity
• Since the credit crisis began, a sharp reversal in risk appetite has meant that the ‘market’ is unwilling to pay as much for future growth
• The wind developers would have double-digit equity FCF yields if they were to abandon their growth plans
• Recovery in orders at Vestas is a positive indicator for revenue growth in 2011/12
Source: Company data, BlackRock, ‘today’ data as at 1st March 2011. Subject to change. *Under new accounting methodology
EDP Renovaveis Vestas wind turbine order backlog (MW)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Q1-
07
Q2-
07
Q3-
07
Q4-
07
Q1-
08
Q2-
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Q3-
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Q4-
08
Q1-
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Q2-
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Q3-
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Q4-
09
Q1-
10
Q2-
10
Q3-
10
Q4-
10*
Vestas order backlog (MW)
Market cap: €6.4bn
Market cap: €4.3bn
Book Value €5.4bn
-2
0
2
4
6
8
10
Jun-08 Today
Book value Growth pipeline
34
BGF New Energy: Exposure
Source: BlackRock as at end March 2011. Indicative of portfolio only. Subject to change
Sector Exposure Geographical Exposure by Country of Risk
Renewable37%
Alternative Fuels19%
Energy Storage
0%
Cash4%
Automotive/On Site
Generation1%
Materials Technology
11%
Enabling Energy
Technology28%
Global39%
USA32%
China8%
Cash4%
Africa3%
Latam3%
Canada1%
Europe10%
Of which:Wind Farms 15%Wind Turbines 7%& Components Solar 7%Other 7%
35
Total number of holdings: 68
The Stats: BGF New Energy Fund - Top 10 holdings
Company Sector Country % of Fund
Vestas Wind Systems Renewable – Wind Turbines Denmark 5.8
Iberdrola Renovables Renewable – Wind Farms Spain 5.0
Johnson Controls Energy Efficiency USA 4.8
Archer Daniels Midland Alternative Fuels USA 4.3
Novozymes Alternative Fuels Denmark 4.3
Johnson Matthey Materials Technology UK 4.1
Quanta Services Enabling Energy Technology USA 3.5
Itron Enabling Energy Technology USA 3.4
Schneider Electric Enabling Energy Technology France 3.1
ITC Holdings Corp Enabling Energy Technology USA 3.1
TOTAL 41.3%
Source: BlackRock. Data as at end March 2011.
36
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-09
Jun-
10
Dec
-10
Reb
ased
to 1
00
BGF New Energy Fund performance
Source: Bloomberg. Wind Sector performance using FAN US Equity, as at 1st April 2011. Performance shown net to 31st March 2011
Wind Sector
BGF New Energy
MSCI World Equities
• Launched in 2001
• Lead Fund Managers: Robin Batchelor/ Poppy Allonby
• AUM of approx US$ 2.9 billion
• Open-ended SICAV
• 60-90 holdings
• AA rated – S&P Fund Research
• A rated – OBSR
US$ (net of fees) YTD* 2010 2009 2008 2007 2006 2005 2004 2003 2002
BGF New Energy Fund 8.2 -12.8 21.0 -54.1 56.5 31.6 21.1 31.5 47.0 -56.3
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New Energy conclusions
• New Energy is back once again on both the political agenda and investors’ radars. Why?
– Triple digit oil prices have returned
– The future of the nuclear industry is in doubt
– Energy security concerns have been heightened by unrest in the MENA region
• This could prove to be a pivotal moment for the sector as these tailwinds gather momentum, valuations are historically low and New Energy technology is becoming increasingly cost competitive
• Both renewable energy and energy efficiency are poised to benefit
• One of the most experienced and best resourced teams in the space
- Four dedicated portfolio managers
– Long track record
– Sizable assets
– Access to management
DSP BlackRock World Energy Fund
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^ Composite Benchmark = (70% MSCI World Energy (Net & Expressed in INR) + 30% MSCI World (Net & Expressed in INR). Note: As per the SEBI standards, for performance reporting, the “since inception” returns are calculated on Rs 10/- invested at inception. For this purpose the inception date is deemed to be the date of allotment. The ‘returns’ shown are for the Regular Plan - Growth Option. Performance in INR term.
Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments.
CAGR as on March 31, 2011
DSP BlackRock World Energy Fund Benchmark^
Last 1 year 26.18% 24.10%
Since Inception Returns 15.60% 22.98%
NAV/ Index Value (Rs) 12.661 140.02
Date of allotment Aug 14, 2009
DSP BlackRock World Energy Fund: Performance
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Minimum Investment and Minimum Additional Purchase
• Regular Plan: Rs. 5000/- and Rs. 1000/- thereafter• Institutional Plan: Rs. 1 cr. and Rs. 1000/- thereafter
• Options available:
Growth(for both plans)
Dividend - Payout- Reinvest
Entry Load (both plans)
Nil
Exit Load (both plans)
For holding period: < 12 months: 1%; holding period >= 12 months: Nil
DSP BlackRock World Energy Fund: Scheme Features
Thank You
42
Investment Objective: An open ended Fund of Funds Scheme investing in international funds and the primary investment objective of the Scheme is to seek capital appreciation by investing predominantly in the units of BlackRock Global Funds – World Energy Fund (BGF – WEF) and BlackRock Global Funds – New Energy Fund (BGF – NEF). The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. The Scheme may also invest a certain portion of its corpus in money market securities and/or money market/liquid schemes of DSP BlackRock Mutual Fund (Fund), in order to meet liquidity requirements from time to time. There is no assurance that the investment objective of the Scheme will be realized.Asset Allocation: 1. Units of BGF – WEF# or other similar overseas mutual fund scheme(s): 50% to 100% 2. Units of BGF – NEF# or other similar overseas mutual fund scheme(s): 0% to 30% 3. Money market securities and/or units of money market/liquid schemes of DSP BlackRock Mutual Fund: 0% to 20%#in the shares of BGF – WEF and BGF – NEF, Undertaking for Collective Investment in Transferable Securities (UCITS) III fund.Features: SIP only in Regular Plan, SWP & STP available in each plan of the scheme. Nomination facility available, subject to applicable conditions as per the Statement of Additional Information (SAI) and Scheme Information Document (SID). Declaration of NAV on all Business Days. Redemption normally within 5 Business Days. Sale and Redemption of Units on all Business Days at Purchase Price and Redemption Price respectively. Minimum investment: Rs. 5,000/- (Reg. Plan)/Rs. 1 crore (Inst. Plan). Entry load: NIL. Exit load: Holding Period < 12 months: 1%, Holding Period >= 12 months: NIL. Investors shall bear the recurring expenses of the Scheme in addition to the expenses of the underlying scheme(s) in which the Scheme will make investment.Statutory Details: DSP BlackRock Mutual Fund was set up as a Trust and the settlors/sponsors are DSP ADIKO Holdings Pvt. Ltd. & DSP HMK Holdings Pvt. Ltd. (collectively) and BlackRock Inc. (Combined liability restricted to Rs. 1 lakh). Trustee: DSP BlackRock Trustee Company Pvt. Ltd. Investment Manager: DSP BlackRock Investment Managers Pvt. Ltd. Risk Factors: Mutual funds, like securities investments, are subject to market and other risks and there can be no assurance that the Scheme’s objectives will be achieved. As with any investment in securities, the NAV of Units issued under the Scheme can go up or down depending on the factors and forces affecting capital markets. Past performance of the sponsor/AMC/mutual fund does not indicate the future performance of the Scheme. Investors in the Scheme are not being offered a guaranteed or assured rate of return. Each Scheme/Plan is required to have (i) minimum 20 investors and (ii) no single investor holding>25% of corpus. If the aforesaid point (i) is not fulfilled within the prescribed time, the Scheme/Plan concerned will be wound up and in case of breach of the aforesaid point (ii) at the end of the prescribed period, the investor's holding in excess of 25% of the corpus will be redeemed as per SEBI guidelines. If the SEBI limits for overseas investments allowed to the Fund are expected to be exceeded, subscriptions and switches into the Scheme may be temporarily suspended/SIP/STP into the Scheme may be terminated. DSPBRWEF is the name of the Scheme and does not in any manner indicate the quality of the Scheme, its future prospects or returns. For scheme specific risk factors, please refer the Scheme Information Document. For more details, please refer the Key Information Memorandum cum Application Forms, which are available on the website, www.dspblackrock.com, and at the ISCs/Distributors. Please read the SID and SAI carefully before investing.
Disclaimer
Appendix
44
Poppy Allonby, CFA, director and portfolio manager, is responsible for co-managing the Team’s energy and alternative energy portfolios. Ms. Allonby's service with the firm dates back to 2000, including her years with Merrill Lynch Investment Managers (MLIM) which merged with BlackRock in 2006. Prior to working on the Natural Resources team, Ms. Allonby was an analyst on the US Equity Team where she was responsible for the basic materials, utilities and energy sectors.
Ms. Allonby earned a BSc degree in physics from the Imperial College, London in 2000.
Alex Ball, analyst and product specialist for the Natural Resources Equity products, provides a link between the investment teams and the account managers. Mr Ball joined BlackRock in 2009 as part of the graduate scheme. Prior to working on the Natural Resources team, he was a member of the Proprietary Alpha Strategies team.
Mr Ball earned a BA degree, in english literature and language from Oxford University in 2009.
Robin Batchelor, managing director and portfolio manager, joined the Natural Resources Team in London in 1996 and worked initially on the gold and mining funds. Mr. Batchelor subsequently developed the Team’s energy capability and began managing dedicated energy portfolios in January 1999. Mr. Batchelor is responsible for both traditional oil and gas investment funds as well as alternative energy portfolios. He is also joint chief investment officer of the BlackRock Natural Resources Team.
Mr. Batchelor earned his BSc in applied geology from Glasgow University and Colorado State University and his MSc in investment analysis from Stirling University. In 2001, Mr. Batchelor was named "One of the Top Twenty Fund Managers in the World" by Forbes magazine.
Alastair Bishop, director and portfolio manager is responsible for covering the energy and alternative energy sectors. Mr. Bishop joined BlackRock in 2010 from Piper Jaffray where he was a Senior Research Analyst covering the Clean Technology industry. Prior to joining Piper Jaffray in 2009, he covered the European Renewable Energy and Industrial sectors for 8 years at Dresdner Kleinwort Investment Bank.
Mr. Bishop earned a BSc degree in Economics from the University of Nottingham in 2001.
BlackRock Natural Resources team biographies (in alphabetical order)
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Team biographies (contd.)
Clive Burstow, vice president and portfolio manager, is responsible for covering the gold and mining sectors. Mr. Burstow joined BlackRock in 2010 from Alliance Bernstein where he was a EMEA Materials Analyst and Growth equities Precious Metals analyst. Prior to joining Alliance Bernstein in 2007, he was with Baring Asset Management as lead analyst for the Global Resources Fund.
Mr. Burstow earned a BEng degree in mining from the Camborne School of Mines in 1993.
Desmond Cheung, director and portfolio manager, is responsible for covering the agriculture sector and China. Prior to joining BlackRock in 2007, Mr. Cheung spent five years at Hang Seng Bank Ltd, a major subsidiary of HSBC Group in Hong Kong, as a credit and relationship manager specializing in financing metal companies in the Greater China region.
Mr. Cheung earned a BA degree in accounting from the Chinese University of Hong Kong in 2000 and an MBA degree from Judge Business School, Cambridge University in 2006.
Richard Davis, managing director and portfolio manager, is responsible for managing a range of natural resources portfolios, including agriculture, mining, gold and income strategies. Mr. Davis' service with the firm dates back to 1994, including his years with Mercury Asset Management and Merrill Lynch Investment Managers (MLIM). Prior to joining MLIM, he worked as a geologist for three years in Ireland and worked on mineral exploration and resource evaluation projects in base metals, gold and diamonds.
Mr. Davis earned a BA degree in geology from Trinity College, Dublin in 1989 and an MSc degree in mineral exploration from Imperial College, London in 1990.
46
Team biographies (contd.)
Joshua Freedman, associate and portfolio manager, is responsible for covering the global energy and energy technology sectors. Mr Freedman's service with the firm dates back to 2005, including his time with Merrill Lynch Investment Managers (MLIM). Prior to joining the team, he worked on MLIM's Emerging Europe team.
Mr. Freedman earned a BA degree in engineering from Downing College, Cambridge.
Evy Hambro, managing director and portfolio manager, is responsible for the management of several gold and mining portfolios and is joint chief investment officer of the BlackRock Natural Resources Team. Mr. Hambro's service with the firm dates back to 1994, including his years with Mercury Asset Management and Merrill Lynch Investment Managers (MLIM).
Mr. Hambro earned a BSc degree in marketing, from Newcastle University.
Thomas Holl, CFA, associate and portfolio manager, is responsible for covering the gold and mining sectors. Mr. Holl moved to his current role in 2008. His service with the firm dates back to 2005, including his time with Merrill Lynch Investment Managers (MLIM). At MLIM, Mr. Holl was a member of the Global Equity Team and the Real Estate Team as a member of the graduate training program.
Mr. Holl earned a BA degree in Land Economy from Cambridge University in 2006.
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Team biographies (contd.)
Catherine Raw, CFA, director and portfolio manager, is responsible for covering the gold and mining sectors. Ms. Raw's service with the firm dates back to 2003, including her years with Merrill Lynch Investment Managers. Prior to joining MLIM, she worked at Anglo American Plc. in London and Johannesburg and at Boliden's Laisvall mine in Sweden as a geological field assistant underground.
Ms. Raw earned a MA degree in Natural Sciences from Downing College, Cambridge University in 2002 and an MSc degree in Mineral Project Appraisal from Imperial College, London in 2003.
Malcolm Smith, vice president and product specialist, is responsible for all product specialist functions for the Natural Resources Equity products. Mr. Smith's service with the firm dates to 2005, including his time with Merrill Lynch Investment Managers (MLIM). At MLIM, he worked within the retail business with a particular focus upon the Luxembourg and UK unit trust fund ranges. He moved to his current role with the Natural Resources Team in 2006. Prior to joining MLIM, he worked on the European equity team of a global multi-manager.
Mr. Smith earned an MA degree in accountancy from Aberdeen University in 2004.
Fiona Stubbs, associate and product specialist for the Natural Resources Equity products providing a link between the investment teams and account managers. Ms Stubbs’ time with the firm dates back to 2007. Prior to joining the Natural Resources team she worked in Global Consultant Relations with a number of assigned investment consultancies alongside their lead relationship managers, engaging in a variety of activities designed to support consultants' work with mutual and potential clients.
Prior to joining BlackRock in 2007, Miss Stubbs earned a BSc in Biology at Oxford Brookes University in 2002.
