Information Technology21.5% Financials15.3% Industrials15.2% Materials11.6% Consumer Discretionary9.3% Telecommunication Services8.2% Energy7.2% Health Care4.6% Real Estate4.0% Consumer Staples3.1%
|% OF PORTFOLIO|
|Reliance Industries Ltd.||5.5%|
|Aena SME S.A.||5.3%|
|Capital One Financial Corp.||4.5%|
|T-Mobile US, Inc.||4.4%|
|New World Development Co. Ltd.||3.8%|
Alphabet, Inc. is a newly founded holding company for the Google group of businesses. Under the new operating structure, its main Google business will include search, ads, maps, apps, YouTube and Android and the related technical infrastructure (the 'Google business'). Businesses such as Calico, Nest, and Fiber, as well as its investing arms, such as Google Ventures and Google Capital, and incubator projects, such as Google X, will be managed separately from the Google business. The new legal and operating structure will be introduced in phases over the coming months and when finalized, Google anticipates that it will result in two reportable segments for financial reporting purposes, with the Google business presented separately from other Alphabet businesses taken as a whole. Accordingly, Alphabet will report its results under this new structure commencing with its Q4 earnings release and its Annual Report on Form 10-K for the period ending December 31, 2015. The company was founded on 2nd October, 2015 and is headquartered in Mountain View, CA.
Reliance Industries Ltd. engages in exploration and production of oil and gas, petroleum refining and marketing textiles, retail and special economic zones. The company also markets petrochemicals, polyester, fiber intermediates, plastics and chemicals. It has three reportable segments: petrochemicals, refining and oil & gas. The petrochemicals segment includes production and marketing operations of petrochemical products, including high and low density polyethylene, polypropylene, polyvinyl chloride, poly butadiene rubber, polyester yarn, polyester fibre, purified terephthalic acid, paraxylene, ethylene glycol, olefins, aromatics, linear alkyl benzene, butadiene, acrylonitrile, caustic soda and polyethylene terephthalate. The refining segment includes production and marketing operations of the petroleum products. The oil & gas segment includes exploration, development and production of crude oil and natural gas. Reliance Industries was founded by Dhirubhai Hirachand Ambani in 1966 and is headquartered in Mumbai, India.
Aena SA engages in the management and operation of a group of airports. It operates through the following segments: Airports, Off-terminal Services, International, and other. The Airports segment includes operations as airport manager, and management of commercial spaces in airport terminals. The Off-terminal Services segment operates parking lots and garages outside the terminals, and of the industrial and real estate assets. The International segment deals with the international development business. The company was founded on February 25, 2011 and is headquartered in Madrid, Spain.
Facebook hosts a social networking service that allows its members to share content among their various social circles, and to restrict access through specified criteria. It is currently the pre-eminent global social platform, with ample room for international penetration growth, especially in emerging markets. It also has great scope to monetize its user base globally and to enjoy greater market share of online advertising, especially on mobile devices.
Capital One is a diversified financial services holding company. The company's services include domestic and international credit card lending, consumer banking, and commercial banking. Capital One is the fourth largest issuer of Visa and MasterCard credit cards in the United States and became the 5th largest U.S. depository in February 2012 when it acquired the U.S. business of ING Direct.
Capital One's business model generates high return on assets and high end of industry returns on tangible common equity (ROTCE). Its business model held up through the recession and has only been modestly impacted by regulation. As a result of its high ROTCE business model, Capital One generates capital quickly which enables it to grow organically while returning capital to shareholders.
T-Mobile US, Inc. provides mobile communications services under the T-Mobile, MetroPCS, and GoSmart brands in the U.S., Puerto Rico, and the U.S. Virgin Islands. It offers postpaid and prepaid wireless voice, messaging and data services, and wholesale wireless services. The company also provides wireless handsets and accessories, including smartphones; wireless-enabled computers, such as notebooks and tablets; and data cards manufactured by various suppliers. It sells services, handsets, tablets, and accessories to consumers through the company's owned and operated retail stores, as well as through Websites; and to dealers and other third party distributors for resale through independent third-party retail outlets and a various third-party Websites. T-Mobile US, Inc. was formed through the business combination between T-Mobile USA, Inc. and MetroPCS Communications, Inc. on April 30, 2013 and is headquartered in Bellevue, WA.
Citigroup is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers around the world. The Company's services include investment banking, retail brokerage, corporate banking, and cash management products and services.
Citigroup's strategy focuses on banking trade flows between emerging markets, banking the affluent customer in emerging markets, and restructuring its U.S. retail bank. Citigroup has a global franchise with the ability to capture the banking revenues associated with trade flows as well as handle the cash management business of corporations. Banking the global emerging consumer is an attractive business with good returns and also provides Citigroup with the necessary deposits to fund its Corporate bank. Lastly, the realignment of the U.S. business and redeployment of that capital into higher return businesses with the potential for faster growth could lead to a business with a better than industry returns over time.
Baidu is the leading internet search engine in China. As with Google, advertisers bid on Baidu-generated "key words." Baidu is paid a fee when one uses its search function, clicks on a key word, and moves to the advertiser's website. The company has nearly 80% market share of Chinese search, making it more dominant than Google is in the United States.
As online penetration increases, advertisers should begin to switch their advertising spending from more traditional media (ie TV, newspaper) to online mediums (ie internet search, video). The average Chinese person spends roughly 3x of his or her personal time using the internet versus watching TV. Despite this dynamic, 60% of China's advertising budgets are spent on TV, 6x those that target the internet. As the proportion of advertising spend adjusts to time spent on various media activities, online advertising spending should begin to take share.
As social networking websites like Facebook and Twitter become more prevalent, concerns arise over whether these platforms can become a popular method for advertising, diverting business from Baidu. However, the effectiveness and return on investment of the search medium is well-documented, while the newer social advertising business models are still young and unproven.
|Portfolio P/E Forward 12 Months*||14.1x|
|Portfolio Price to Cash Flow*||8.4x|
|Portfolio Price to Book*||1.7x|
|Median Market Capitalization*||$20.6 B|
|Number of Holdings||32|
|5-Year Beta† (A shares vs. MSCI AC World Index)||0.89|North America42.0% Europe ex UK25.8% Asia Pacific ex Japan25.6% UK6.6% Large Cap (> $12 B)75.8% Mid Cap ($2.5 to $12 B)21.6% Small Cap (< $2.5 B)2.7%