Manning & Napier, Inc. (NYSE:MN) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 05:00 pm ET


Manning & Napier, Inc. (NYSE:MN) Q2 2020 Earnings Conference Call - Final Transcript


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Marc Mayer

points. The mutual fund equivalents of our multi-asset class solutions all ranked in the top decile of their competitive groups for the year-to-date and all are well into the first quintile over one and three years.

In a year when it is not hard for clients to be facing losses despite the strong bounce in equities in the second quarter, all of our multi-asset class and target date funds are up this year in absolute terms. We have over $600 million in our target date collective investment trusts, which are used in retirement plans. They are built on the same multi-asset class strategies we just referenced. All 11 target date vintages rank in the top 4% of their competitive set year-to-date and over the trailing year.

Continuing with our fundamental bottom-up strategies, our core US equity, core non-US equity and core equity unrestricted portfolios all beat their respective benchmarks in the second quarter, extending their already robust leads on the year to 547, 802 and 591 basis points respectively. Also notable is that each strategy's strong performance extended its relative performance edge to over 100 basis points for both the trailing three- and five-year time periods as well.

For our core non-US equity strategy in particular, the turnaround over the past few years has been remarkable. In the second quarter, the portfolio delivered 634 basis points of outperformance, adding to already strong recent results. In years past, our unique research disciplines and processes, coupled with strong performance, led our core non-US equity strategy to wide recognition and category-leading status. While a difficult stretch last decade challenged the story, the strategy has fully restored its luster. I'd like to recognize the ability of our core equity research team, which operates globally in support of US international and global portfolios to rigorously pursue our time-tested disciplines and recover all underperformance and then some for our clients. We are committed to delivering through full market cycles and, for 50 years, we have been doing just that.

Our disciplined value suite performed well on a relative basis in the second quarter. While the value style continues to underperform growth, both disciplined value unrestricted and US outperformed their respective benchmarks last quarter and the performance over one, three, five and 10 years remained stellar. These strong relative results position the disciplined value suite well for future growth as maintaining exposure to the value style remains prudent ex ante.

Our Rainier International Small Cap team produced another quarter of remarkable returns with its Rainier International Discovery Fund delivering 603 basis points of relative outperformance in the second quarter. The Fund is now ahead of its international small-cap benchmark by 1,605 basis points year-to-date. At a time when its asset class is down double digits, the Rainier team has generated materially positive absolute returns. As a result, the Fund is now ahead of its benchmark by an outstanding 768 and 440 basis points annualized over the trailing three and five years respectively. Since inception in 2012, the