Quality equities investing brochure

Quality equities investing

This document is being provided for informational purposes for discussion with institutional investors and financial advisors only. Circulation must be restricted accordingly. Nothing herein should be construed as an offer to enter into any contract, investment advice, a recommendation of any kind, a solicitation of clients, or an offer to invest in any particular fund, product, investment vehicle or derivative.

Who we are

Ninety One is an active, global investment manager. Our goal is to provide long-term investment returns for our clients while making a positive difference to people and the planet.

Established in South Africa in 1991, as Investec Asset Management, the firm began as a small start-up offering domestic investments in an emerging market. In 2020, as a global firm proud of our emerging market roots, we demerged to become Ninety One.

We are committed to developing specialist investment teams organically. Our heritage and approach lets us bring a different perspective to active and sustainable investing across equities, fixed income, multi-asset and alternatives to our clientsinstitutions, advisors and individual investors around the world. Investment involves risk; losses may be made.

Our purpose

We created our firm with a dream in mind: to invest for a better tomorrow by building a better firm, making better investments and contributing to a better world.

Better investing

Long-term investment excellence is our primary function and is non-negotiable. We aim to provide our clients with investment outcomes that allow them to achieve their financial goals.

Better firm

We are building a firm that aims to achieve excellence over the long term, with a culture that encourages our people to reach their highest potential and puts our clients at the centre of our business.

Better world

We seek to make a difference to the world’s greatest challenges by investing our clients’ capital in a responsible manner towards the most responsible users of that capital. Being a fully engaged participant in society and actively seeking to preserve our natural environment is both our opportunity and promise.

Ninety One's approach to Quality investing

Our emerging market heritage gives us, as investors, a different lens through which to look at the world and a vast experience of navigating challenging environments. We channel this experience to bring a unique approach to investing.

This unique approach and lens to investing is applied across all of our capabilities including equities, fixed income, multi-asset and alternatives.

Within our equities capability, the Ninety One Quality team seeks to invest in high quality companies across a range of investment solutions tailored to varying investor needs. We manage attractive total return strategies with both a global and regional focus, some of which are focused on capital growth and others on sustainable dividend growth.

Hallmarks of our Quality approach

Purist Quality philosophy with strong valuation discipline, consistently applied over the long term

Differentiated insight derived from diverse perspectives across our global platform

Sustainability embedded in our philosophy and fully integrated into our in-depth proprietary fundamental research

High conviction, low turnover portfolios

Record of long-term outperformance with smaller drawdowns in down markets and lower volatility

4 Sustainable cash generation and effective capital allocation

5

Not all quality is Ninety One quality

From a universe of over 20,000 listed global equity securities, our fundamental research selects quality stocks for inclusion in portfolios. This reflects a purer expression of quality that is focused only on what we believe to be best-of-breed ‘Quality’ companies.

Quality companies have enduring competitive advantages that are derived from intangible assets such as brand, intellectual property, unique content and networks. These exceptional qualities provide these companies with barriers to entry and pricing power, which in turn enable them to deliver long-term structural growth and resilience, and compound cash flows at sustainably high levels of profitability, far beyond market expectations.

The opportunity set has evolved over time beyond consumer staples, to technology and healthcare sectors, as well as certain capital-light financials, such as rating agencies and savings institutions. To reflect this changing investment landscape, our portfolios have evolved over time.

We do not believe in ‘Quality-at-anyprice’. Valuation is at the heart of our investment process, and we believe this is a key differentiator versus other quality managers. We conduct comprehensive valuation analysis on a medium to long term view, with reference to a company’s quality and growth characteristics, longterm history, competitors, and other asset classes, and we use scenario analysis to stress test our conclusions. We prefer to focus on cash flow rather than earningsbased metrics as these are less open to manipulation and we believe represent a truer reflection of the value of a stock.

We believe we adopt a purist approach to investing in quality companies: not all quality is Ninety One quality.

Our approach to sustainability

As long-term Quality investors, we take a holistic approach to sustainability in our investment philosophy and process, which goes beyond a simple consideration of ESG risk using third party metrics. Rather, this requires an in-depth proprietary assessment of the durability of a company’s business model and competitive advantage, the resilience of its financial model and the alignment of capital allocation decisions with the longterm interests of shareholders and other key stakeholders.

The range and importance of stakeholder relationships will vary by company. We believe these relationships are not just a matter of corporate social responsibility, but a prerequisite for delivering longterm sustainable value. Successful relationships can provide important business and customer intelligence, open new markets, reduce risk, improve supplychain efficiency, build brand loyalty and reputation, and support creativity and innovation. They can lead to improved employee satisfaction, which itself can lead to enhanced productivity as well as talent retention and attraction.

Companies with sustainable business models, and business practices that support the society and environment in which they operate, can enhance their returns and cash flows, and lower their risk and cost of capital as a result. Therefore, building and sustaining strong stakeholder relationships can itself be an enduring competitive advantage, supporting longterm value creation.

Seeking greater certainty in uncertain times

A broad range of Quality strategies

Global Franchise

Global

Global Quality Equity Income

American Franchise

Asia Pacific Franchise

Regional

UK Alpha

UK Equity Income

Geographically diversified: globally integrated, philosophically aligned team based in the UK, South Africa and the US

Shared insight from managing a broad range of Quality strategies – both global and regional

Well-resourced team of almost 30 investment specialists

Manage over £25 billion1 in Quality investment strategies

Strong track record which has weathered various market conditions

Past performance does not predict future returns, losses may be made. No assurance can be given that the Strategy will be successful or that investors will not lose some or all of their capital.

1. Source: Ninety One as at 31 December 2022.

Clyde Rossouw and Simon Brazier are co-Heads of our Quality team, which is based in London, Cape Town and New York. They are supported by an experienced and well-resourced team of investment specialists, who are all generalists and research companies in any sector. They share a consistent investment philosophy and research framework, which is derived from a focus on attractively valued, quality businesses with strong business models, financial models and capital allocation.

30

8

13 £25bn

Quality specialists globally years average tenure years average industry experience investment team AUM2

Clyde Rossouw Co-Head of Quality Simon Brazier Co-Head of Quality

Global funds

Global Franchise

Concentrated global capital growth fund

Portfolio manager: Clyde Rossouw

Inception1 : April 2007

25-40

Global Quality Equity Income

Global sustainable dividend growth fund

Portfolio managers: Clyde Rossouw, Abrie Pretorius

Inception1 : March 2007

Regional funds

Asia Pacific Franchise

Concentrated Asian capital growth fund

Portfolio manager: Charlie Dutton

£154m £217m

fund size 3 fund size 3

Inception1 : October 2017

25-40

£25m

30-50 holdings2 holdings2 holdings2

fund size 3

American Franchise

Concentrated US capital growth fund

Portfolio manager: Paul Vincent

Inception1 : June 2017

20-40 holdings2 fund size 3 £492m

strategy size £14.93bn £1.91bn strategy size strategy size £636m £225m strategy size

General risks. The value of investments, and any income generated from them, can fall as well as rise. Where charges are taken from capital, this may constrain future growth. Ongoing costs and charges will impact returns. Past performance does not predict future returns, losses may be made. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations. Investment objectives and performance targets are subject to change and may not necessarily be achieved, losses may be made. Environmental, social or governance related risk events or factors, if they occur, could cause a negative impact on the value of investments.

Source: Ninety One as at 31 December 2022.

1. Strategy inception in the Quality Team.

2. These internal parameters are subject to change not necessarily with prior notification.

3. The fund size shown is for the OEIC fund.

For further information on indices or investment team please see Important information section.

UK funds UK Alpha

Diversified UK capital growth strategy fund

Portfolio managers: Simon Brazier, Anna Farmbrough

Inception1 : January 2015

UK Equity Income

Concentrated UK sustainable dividend growth fund

Portfolio manager: Ben Needham

Inception1 : January 2015

50-90 30-50 holdings2 holdings2

fund size 3 fund size 3 £997m £175m

Specific risks. Geographic / Sector: Investments may be primarily concentrated in specific countries, geographical regions and/or industry sectors. This may mean that, in certain market conditions, the value of the portfolio may decrease whilst more broadly-invested portfolios might grow. Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income. Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Emerging market: These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems. Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company. Concentrated portfolio: The portfolio invests in a relatively small number of individual holdings. This may mean wider fluctuations in value than more broadly invested portfolios. Style bias: The use of a specific investment style or philosophy can result in particular portfolio characteristics that are different to more broadly-invested portfolios. These differences may mean that, in certain market conditions, the value of the portfolio may decrease while more broadly-invested portfolios might grow.

Important information

This is a marketing communication for institutional investors and financial advisors only. It is not to be distributed to retail customers who are resident in countries where the Fund is not registered for sale or in any other circumstances where its distribution is not authorised or is unlawful. Please visit www.ninetyone.com/registrations to check registration by country.

The information may discuss general market activity or industry trends and is not intended to be relied upon as a forecast, research or investment advice. There is no guarantee that views and opinions expressed will be correct. The investment views, analysis and market opinions expressed may not reflect those of Ninety One as a whole, and different views may be expressed based on different investment objectives. Ninety One has prepared this communication based on internally developed data, public and third party sources. Although we believe the information obtained from public and third party sources to be reliable, we have not independently verified it, and we cannot guarantee its accuracy or completeness (ESG-related data is still at an early stage with considerable variation in estimates and disclosure across companies. Double counting is inherent in all aggregate carbon data). Ninety One’s internal data may not be audited. Ninety One does not provide legal or tax advice. Prospective investors should consult their tax advisors before making tax-related investment decisions.

The Fund is a sub-fund of the Ninety One Funds Series range (series i - iv) which are incorporated in England and Wales as investment companies with variable capital. Ninety One Fund Managers UK Ltd (registered in England and Wales No. 2392609 and authorised and regulated by the Financial Conduct Authority) is the authorised corporate director of the Ninety One Funds Series range.

This communication is not an invitation to make an investment nor does it constitute an offer for sale. Any decision to invest in the Fund should be made only after reviewing the full offering documentation, including the Key Investor Information Documents (KIID) and Prospectus, which set out the fund specific risks. Fund prices and copies of the Prospectus, annual and semi-annual Report & Accounts, Instruments of Incorporation and the Key Investor Information Documents may be obtained from www.ni netyone.com

THIS INVESTMENT IS NOT FOR SALE TO US PERSONS.

Except as otherwise authorised, this information may not be shown, copied, transmitted, or otherwise given to any third party without Ninety One’s prior written consent. © 2023 Ninety One. All rights reserved. Issued by Ninety One, January 2023.

Indices

Indices are shown for illustrative purposes only, are unmanaged and do not take into account market conditions or the costs associated with investing. Further, the manager’s strategy may deploy investment techniques and instruments not used to generate Index performance. For this reason, the performance of the manager and the Indices are not directly comparable.

If applicable MSCI data is sourced from MSCI Inc. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

If applicable FTSE data is sourced from FTSE International Limited (‘FTSE’) © FTSE 2023. Please note a disclaimer applies to FTSE data and can be found at www.ftse.com/products/downloads/FTSE_Wholly_Owned_Non-Partner.pdf.

Investment Team

There is no assurance that the persons referenced herein will continue to be involved with investing for this Fund, or that other persons not identified herein will become involved with investing assets for the Manager or assets of the Fund at any time without notice. References to specific and periodic team meetings are not guaranteed to be held or fully attended due to reasonable priority driven circumstances and holidays.

Contact us

United Kingdom

55 Gresham Street

London, EC2V 7EL

Telephone: +44 (0)20 3938 1900

enquiries@ninetyone.com

www.ninetyone.com

Telephone calls may be recorded for training, monitoring and regulatory purposes and to confirm investors’ instructions.