Thornburg Investment Management Quarterly Update
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Q1 2021
Thornburg Investment Management Quarterly Update
TP321 Brian McMahon Jason Brady, CFA
All data in this presentation is as of 3/31/2021 unless otherwise noted. Vice Chairman President and CEO
and Chief Investment Strategist
Ben Kirby, CFA Matthew Burdett
Co-Head of Investments Portfolio Manager
and Managing Director and Managing DirectorThornburg Investment Income Builder Fund
Key Macroeconomic Issues
April 2021
COVID-19 pandemic stay-at-home orders persist in some countries, China real GDP grew in 2020, alone among large economies, and is
though loosening in many others, including the U.S. expected to grow strongly again in 2021 and 2022.
In most developed countries, 2020 GDP was significantly lower due to Central banks are flooding economies with liquidity, commercial bank
COVID-19 restrictions on activity. deposits are growing rapidly, U.S. money supply (M2) +27% YoY.
GDP, global trade, employment, industrial production, and consumer Commodity price inflation is elevated, relative to prior decade levels.
spending are all showing significant recoveries in most economies in Producer price indices are also elevated, some shortages reported.
2021.
Financial asset prices have been extremely volatile at times, but overall
Vaccines for preventing COVID-19 have been tested, show strong supported by abundant liquidity.
medical efficacy, and are being administered in most developed
Investors struggle to assess the length of the COVID-19 related downturn
countries.
in economic activity, the pace and extent of recovery, and the immediate
Expect news, positive and negative, in the coming months as the and longer run impacts on various issuers of stocks and bonds.
extensive global inoculation effort unfolds and COVID-19 variants
For now, equity investors expect mid/high single digit GDP growth and
increase.
>20% global corporate earnings growth in 2021.
Government bodies around the world continue the unusual fiscal stimulus
Bond investors expect a limited rise in longer maturity interest rates in
steps to mitigate the consequences of COVID-related economic
2021, and strong credit performance.
disruption in order to quickly restore normal economic activity post-
COVID-19. New bond issuance volumes have been extremely high, both by
governments for deficit financing and corporations for reinforcing liquidity.
The U.S. Congress has so far passed more than $5 trillion of fiscal
So far, high supply of bonds has been met with strong demand from
mitigation measures. (U.S. GDP in 2019 was $20.5 trillion).
private investors and central banks. Equity issuance is also elevated.
Many other countries have enacted broadly similar fiscal mitigation
For now, many traditional backward-looking measures of macroeconomic
measures, typically smaller as a % of GDP.
activity are not useful until households and businesses can resume more
Some countries (not yet including the U.S.) have enacted material normal economic activities.
infrastructure spending programs for fiscal stimulus.
This material is for investment professional use only. 2Thornburg Investment Income Builder Fund
Overview of Equity Portfolio Allocation Shifts
Thornburg Investment Income Builder equity portfolio’s comparative sector weights on various dates
Increases in allocations towards tools for digital communication (Information Technology) and
communications network operators (Communication Services), selected beaten down Financials
Cuts to portfolio allocations to Health Care, Energy, Utilities, Real Estate, and Industrials
SECTOR WEIGHTS (%) AS OF:
31-MAR-2020
to 31-MAR-2021
31-MAR-2020 30-JUN-2020 30-SEP-2020 31-DEC-2020 3-MAR-2021 +/- Weighting
Financials 20.4 23.4 23.9 23.8 25.5 +5.1
Communication Services 19.8 22.5 19.8 18.9 19.9 +0.1
Information Technology 11.7 14.1 17.8 20.3 18.2 +6.5
Health Care 14.1 13.0 11.8 11.2 10.9 -3.2
Consumer Staples 5.2 3.5 4.7 5.1 6.0 +0.8
Energy 8.6 6.8 5.0 4.8 4.4 -4.2
Materials 4.0 3.6 3.2 4.1 4.3 +0.3
Consumer Discretionary 3.2 3.5 3.9 3.3 4.0 +0.8
Utilities 5.2 5.1 3.7 3.8 2.9 -2.3
Real Estate 4.1 4.0 3.2 2.5 2.0 -2.1
Industrials 3.2 0.5 2.6 1.8 1.4 -1.8
Source: Bloomberg
tor weights are percentages of total equity. Portfolio holdings are subject to change daily.
This material is for investment professional use only. 3Thornburg Investment Income Builder Fund
S&P 500 Annual EPS & Income Statement Summaries
2019 to 2022E: -3.3% drop in 2020 revenues nearly finalized with margin pressure leading to -13.4% YoY EPS for the S&P 500 Index portfolio. This provides useful context
for comparing the 2020 business performance of the major equity investments in Thornburg Investment Income Builder.
The slides on the following pages show summary data on the 10 largest equity investments in the Income Builder Fund portfolio at 3/31/2021.
These slides are presented in order of current investment value. Cumulatively, these 10 investments total approximately 38% of fund assets.
EPS ESTIMATE DETAIL 2019 2020E 2021E 2022E
Dollars ($bn)
Sales 11,752 11,359 13,022 13,840
EBIT 1,868 1,585 2,050 2,303
Interest Expense 244 222 211 225
EBT 1,624 1,363 1,839 2,078
Taxes 257 177 290 348
Net Income 1,367 1,187 1,549 1,730
Per Share ($)
Sales/Share 1,415.20 1,365.00 1,555.00 1,680.00
EPS/Share 164.58 142.50 185.00 210.00
Contribution to Growth (%)
Sales 3.5 -3.3 14.6 6.3
Operating Margins -3.4 -11.8 14.7 6.1
Int & Tax -0.9 2.0 1.3 -0.7
Share Count 1.8 -0.2 -0.8 1.8
Change in EPS 1.0 -13.4 29.8 13.5
Source: Standard & Poor’s, Refinitiv, FactSet, Credit Suisse estimates
This material is for investment professional use only. 4Thornburg Investment Income Builder Fund
1. Taiwan Semiconductor
$547 USD Billion Market Capitalization, Net Cash = 3% of Equity Market Capitalization, 1.7% Dividend Yield.
Share price declined 28% from 1/14/20 to 3/19/2020, now recovered to new highs. 2020: Revenue +25% YoY, 2020 EPS +50% YoY.
TSMC (2330 TT)
800
673 TWD = 52 week high share price, 1/21/21
700
600
500
400
300
200
100
248 TWD = 2020 low 3/19/2020, -28% from 1/14/2020 high price of 346 TWD
0
Taiwan Semiconductor is the leading contract manufacturer of semiconductor chips in the world, making processors and memory chips embedded in more
than 11,000 products of more than 500 manufacturers of digital processing and communications devices, motor vehicles, and industrial equipment. The single
largest end market for TSMC semiconductors is wireless handsets. In $US terms, $45.5 billion 2020 revenue (trailing 10-year growth CAGR +12.3%), $30.5
billion EBITDA (trailing 10-year growth CAGR +13.8%. TSMC stock trades mostly in Taiwan $.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 5Thornburg Investment Income Builder Fund
2. Vodafone
44.3 Billion EUR Market Capitalization, 44 Billion EUR Net Debt, 6.06% Dividend Yield. Vodafone’s share price declined 37% from 2/19/2020 to 3/16/2020,
inconsistent partial share price recovery since then. Minority interest IPO of its cell site tower subsidiary, “Vantage Towers,” was completed in March 2021, leaving
Vodafone with approximately 409 million shares worth €9.8 billion.
VODAFONE
180
160
140
120
100
80
60
40
20
98.02 = 52 week low price, 3/16/2020, -37% from 155.8 on 2/19/2020
0
Vodafone and its subsidiaries serve more than 300 million wireless and more than 27 million terrestrial broadband communications customers in Europe,
Africa, and the Middle East. 12 months ended 9/30/20 highlights: 44.5 billion EUR revenue (+1.6% YoY), 14.8 billion EUR EBITDA (+4.6% YoY). Fiscal Year
ended 3/31/21 not yet reported. Vodafone’s revenue growth trend has gradually improved, EBITDA margin improved for five consecutive fiscal years to 3/31/20
on efficiency gains. Vodafone controls approximately 68K tower/rooftop cell sites in Europe via its 81% interest in subsidiary, “Vantage Towers,” which
executed its own IPO in March 2021.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 6Thornburg Investment Income Builder Fund
3. Orange SA
28 Billion Euro Market Cap, 26 billion EUR net debt & minorities, 6.7% 2020 Dividend Yield. Share px -30% from 2/19/20 to 3/16/20, +11% from 3/16/20 to 3/31/21.
2020 Revenue & EBITDA +0.1%/-1% YoY. Orange owns c40k wireless broadcast towers and a strong wireless spectrum portfolio. Orange European terrestrial
fiber/cable footprint passes >48 million homes.
ORANGE SA
16
15.01 = 78 week high share price
14
12
10
8
6
4
2
8.80 = 78 week low price, 9/29/2020, -41% from 52 week high price.
0
France-headquartered Orange is a multinational telecommunications services provider with 214 million mobile customers and 21.7 million terrestrial broadband
customers in 27 countries in Europe, the Middle East, and Africa. 2020 highlights: 42.3 billion EUR revenue, 12.8 billion EBITDA, 23.5 billion net financial debt,
6.7% dividend yield as of 3/31/21. Trailing 5-year revenue & EBITDA growth through 2019 were +0.9%/year and +2.5%/year, respectively.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 7Thornburg Investment Income Builder Fund
4. Samsung
$453 Billion Equity Mkt Capitalization, $365 Billion Enterprise Value, $80 Billion Net Cash. 3.1% Dividend Yield. 2020 Result: Revenue +2.8%, EBITDA +16% YoY
to $66 Billion Expect Stronger 2021: Q1’21 Revenue +17% YoY, Q1’21 Operating Profit +44% YoY.
SAMSUNG
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
42,500 KRW = 2020 low price, 3/23/2020, -31.9% from 62,400 on 1/20/2020
0
Samsung Electronics is one of the world’s largest semiconductor manufacturers. It produces a variety of consumer devices (handsets, TVs, digital displays)
and communications infrastructure equipment. Revenue & EBITDA annual growth rates +3.4% and +7.0% per year, 2015-2020. Samsung capex >$20 billion
$US/year in recent years, making it a leader in 5G communications technology and components.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 8Thornburg Investment Income Builder Fund
5. Deutsche Telekom
79 Billion Euro Mkt Capitalization, 90 Billion Financial Debt, 169 Billion EUR Enterprise Value, 3.5% Dividend Yield. Telekom’s share price declined 34.8% from
2/20/2020 to 3/18/2020. 2020 Results: Revenue +25% YoY (organic +3% YoY) to 101 billion€; EBITDAaL +34.7% YoY (organic +7.9% YoY). Pro-forma (for
Sprint-TMUS merger) EBITDAaL run rate was approximately 35 billion EUR.
DEUTSCHE TELEKOM
20
18
16
14
12
10
8
6
4
2
10.83 EUR = 2020 low price, 3/18/2020, -34.8% from €16.62 on 2/20/2020
0
Deutsche Telekom is a multinational telecommunications services provider with 242 million mobile customers (101 million of these in the U.S.) and 27 million
terrestrial broadband customers in 11 European countries and the USA. Deutsche Telekom owns 540 million shares of U.S.-based T-Mobile, a controlling
interest worth c59 billion EUR at 4/6/21. Deutsche Telekom owns approximately 37,000 cell towers in Germany and the Netherlands, and additional towers in
other European countries. Trailing 5-year revenue and EBITDA growth through 2020 were +7.8%/year and +16.0%/year, respectively, powered significantly by
TMUS.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 9Thornburg Investment Income Builder Fund
6. China Mobile, Ltd.
873 Billion CNY($133 Billion USD) Market Capitalization. Net Cash at 12/31/20 = 38% of Market Cap, EV = $77 Billion USD. 2021 Dividend +1% YoY, 6.5%
Dividend Yield. Share price declined 37% from 1/24/20 to 12/31/20. 2020 Services Revenue +3.2% YoY, Net Income +1.1% YoY, 2020 Free Cash Flow +55%
YoY. Trailing Year Free Cash Flow of 99.8 Billion RMB = 14.5% of Market Cap.
CHINA MOBILE
80
69.70 = 2020 high price, 1/24/2020
70
60
50
40
30
20
10
41.50 = 18 month low price, 1/8/2021, -40.5% from 1/24/20
0
China Mobile is the world’s largest telecommunications services provider with 942 million mobile customers and 210 million terrestrial broadband customers.
2020 highlights: 768 billion CNY revenue, 285 billion CNY EBITDA, 335 billion CNY net cash (38% of equity market capitalization). Trailing 5-year revenue &
EBITDA growth through 2020 were +2.8%/year and +3.5%/year, respectively. Average monthly tariff for a mobile handset customer in Q4’2020 was 47.4
CNY/month ($7.25 US) for average data consumption of 9.4 GB/month. Average home broadband tariff was 34 CNY/month ($5.20 US), with virtually all
connections optical fiber to the home. China Mobile owns 28% of China Tower (which in turn owns c2 million mobile communications towers in China).
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 10Thornburg Investment Income Builder Fund
7. Broadcom
$180 Billion Equity Market Capitalization, $219 Billion Enterprise Value, 3.23% Dividend Yield. Broadcom’s share price declined 48% from 2/12/2020 to 3/18/2020,
now more than fully recovered to a higher price. FY 2020 Result: Revenue +5.7%, EBITDA +8.4% YoY.
BROADCOM
600
$489.96 = 2021 high share price, 2/19/2021
500
400
300
200
100
$167.87 = 2020 low price, 3/18/2020, -48.4% from $324.70 on 2/12/2020
0
Broadcom designs, develops and markets digital and analog semiconductors, wireless radio components, storage adapters, controllers, networking processors
and switches, fiber optic modules, optical sensors, and motion control encoders. An acquisitive firm, Broadcom’s revenue, EBITDA, and per share dividends
grew at CAGRs of +28%, +39%, and +53% per year, respectively, between 2015 and 2020. Broadcom’s business should benefit from the global 5G rollout.
Construction of 5G networks was set back by COVID-19 related delays, consequently, 2020 growth slowed compared to prior years. The need for high quality
digital communications is affirmed.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 11Thornburg Investment Income Builder Fund
8. Total SA
$122 Billion Market Capitalization, $41 Billion Net Debt, 6.64% Dividend Yield. Total’s share price declined 56.7% from 1/6/20 to 3/18/2020, only partially recovered from its
March 2020 low. Annual EBITDA has fluctuated between $16.5 and $45.5 billion over the last decade when oil price averaged $76/bbl, 2020 was near the bottom of that
range with a 2020 average Brent oil price of $43/bbl. YTD 2021 average of $61/bbl Brent and favorable gas trading environment should support an improved result this
year. Total is transitioning to more low carbon power generation and gas processing & distribution, gradually becoming less oil centric.
TOTAL SA
60
50
40
30
20
10
21.80 = 78 week low price, 3/18/2020, -56.7% from 50.44 on 1/6/2020
0
France-based Total SA produces, transports, and supplies crude oil, natural gas, and low carbon electricity. Total also refines petrochemical products and
manages gasoline filling stations in Europe, the U.S., and Africa. Total produces oil and natural gas in volumes approximately equal to 3 million barrels of oil
equivalent daily. Each +/-$10/bbl oil price impacts cash flow by around +/-$3 billion per year. Total’s wind and solar power generation assets are growing
rapidly, putting it on track to be a major global producer of green electricity over the coming decade.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 12Thornburg Investment Income Builder Fund
9. CME Group
(Formerly Chicago Mercantile Exchange): $74 Billion Market Capitalization, $2 Billion Net Debt, 2.9% Trailing Year Dividend Yield. CME share price declined
37.6% from 2/23 to 3/23/2020, now mostly recovered from March 2020 low. 2020 revenue flat YoY; EPS -0.7% YoY on -1% average trade volumes. Lower YoY
volumes in Q1’20. Comparisons get easier in coming quarters. Higher rates and commodities prices should be positive for hedging activity and CME business
volumes.
CME GROUP
250
$223.63= 2020 week high share price, 2/23/20
200
150
100
50
$139.54 = 2020 low price, 3/23/2020, -33.6% from 2/23/2020
0
CME Group exchanges offer a wide range of global benchmark products for trading and hedging assets tied to interest rates, equity indexes, currency
exchange rates, energy, agricultural commodities, and metals. 2020 highlights: $4.9 billion revenue, $3.15 billion EBITDA. 2020 trading volumes flattish YoY on
low interest rate volatility. Incremental profitability on volume increases is high. Average annual trading volume growth since 1972 averaged +13% YoY.
Quarterly trade volumes are volatile.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 13Thornburg Investment Income Builder Fund
10. JPMorgan Chase & Co.
$465 Billion Equity Market Cap., 13.1% Common Equity Tier1 Capital at 12/31/2020, 2.4% Dividend Yield. JPM’s share price declined 42.5% from 2/20/20 to
3/23/20, now fully recovered to new highs. 2020 result: revenue +4% YoY, pre-tax/pre-provision income +5.6% YoY, deposits +34% YoY to $2.1 trillion, solid
competitive positions in retail banking, global corporate banking, capital markets, and asset management. Loss reserves more than doubled in 2020 despite
stronger than expected credit performance.
JPMORGAN
180
$157.65 = trailing 78 week high share price, 3/18/2021
160
140
120
100
80
60
40
20
$79.03 = 2020 low price, 3/23/2020, -42.5% from 2/20/2020
0
JPMorgan Chase & Co is a diversified financial services provider. Trailing 5 year CAGRs, selected metrics: Revenue +9.2%/year, Deposits +10.9%/year,
Operating Income +7.0%/year, Book Value per Share +6.2%/year, Dividend/Share +15.9%/year. Consensus 2021e EPS projections have been raised >15%
YTD 2021 to early April level of $11.00/share. If this level EPS is achieved, JPM should be able to raise its dividend from current $3.60 annual rate and buy
back shares.
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 14Thornburg Investment Income Builder Fund
Next 15 Equity Holdings
The 15 investments shown following were the 11th through the 25th largest equity investments in the Thornburg Investment Income Builder portfolio as of March
31, 2021. The 10 largest equity investments in the fund accounted for approximately 38% of fund assets as of March 31, 2020. Together, the following listed 15
investments account for approximately 31% of fund assets as of March 31, 2021; interest bearing debt and hybrid investments 15% of assets, 23 other equity
investments account for 16% of fund assets.
2020 YTD PERFORMANCE DIVIDEND YIELD
NAME OF COMPANY & [Q1 2021 PERFORMANCE] AT MARCH 31, 2021 ($US) AT MARCH 31, 2021 PRICE
Home Depot +21.6%/[+15.5%] 2.16%
Home improvement retailer operating 2,300 stores in North America, Canada, Mexico
AbbVie +21.0%/[+2.2%] 4.80%
Develops and sells pharmaceutical products
NN Group +15.8%/[+17.3%] 5.59%
Largest life and property/casualty insurer in the Netherlands
Qualcomm Inc. +72.7%/[-12.5%] 1.96%
Develops and delivers key components for wireless communications devices, including handsets
Tesco -5.5%/[-0.2%] 8.48%
U.K.-based multinational grocer and general merchandise retailer
Regions Financial -6.1%/[+29.1%] 3.00%
U.S. regional banking group, mostly operating in Southeastern U.S. states.
Roche Holding +7.90%/[-4.5%] 2.98%
Global health care company develops and sells medicines and diagnostic tools
Assicurazioni Generali -15.0%/[+14.4%] 5.92%
Italy-based multinational life & property/casualty insurers
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 15Thornburg Investment Income Builder Fund
Next 15 Equity Holdings (continued)
The 15 investments shown following were the 11th through the 25th largest equity investments in the Thornburg Investment Income Builder portfolio as of March
31, 2021. The 10 largest equity investments in the fund accounted for approximately 38% of fund assets as of March 31, 2020. Together, the following listed 15
investments account for approximately 31% of fund assets as of March 31, 2021; interest bearing debt and hybrid investments 15% of assets, 23 other equity
investments account for 16% of fund assets.
2020 YTD PERFORMANCE DIVIDEND YIELD
NAME OF COMPANY & [Q1 2021 PERFORMANCE] AT MARCH 31, 2021 ($US) AT MARCH 31, 2021 PRICE
Walgreen’s Boots Alliance -36.5%/[+38.8%] 3.41%
Operates retail drugstores in USA and UK
Chimera Investment -53.2%/[+26.8%] 9.45%
U.S mortgage real estate investment trust with focus on residential mortgage credit
Equitable Holdings +1.8%/[+28.1%] 2.10%
U.S. life insurer & asset manager (controls Alliance Bernstein)
Enel SpA +28.3%/[+0.2%] 4.31%
Multinational electric utility with focus on generation from renewable sources
UBS Group +11.8%/[+10.0%] 2.63%
Global wealth manager, investment bank, and commercial bank
Glencore plc +1.9%/[+23.3%] 2.11%
Diversified global miner & commodities trader
Merck & Co. -10.1%/[-5.0%] 3.37%
Major research driven pharmaceuticals firm, selling products in > 100 countries
Past performance does not guarantee future results.
Source: Bloomberg
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 16Thornburg Investment Income Builder Fund
Next 23 Equity Holdings
23 equity investments with the smallest weightings in the portfolio at 3/31/2021, shown by weighting, top to bottom and left to right. Weightings range from
approximately 1.25% to < 0.1% of portfolio assets; does not include 3 small preferred stock positions held in the portfolio.
AstraZeneca plc Crown Castle International
Pfizer Inc. Apollo Investment Corporation
LyondellBasell Industries NV Lamar Advertising
China Telecom Corporation BAE Systems
MMC Norilsk Nickel Stellantis NV
Citigroup Lukoil PJSC
Cisco Systems Electricite de France
Siemens AG E.ON SE
SLR Investment (formerly Solar Capital, Ltd) AXA SA
Nestle Novartis AG
M&G plc Granite Point Mortgage
Washington Real Estate Investment Trust
Source: FactSet/State Street
Any securities, sectors, or countries mentioned are for illustrative purposes only. Holdings are subject to change.
Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
This material is for investment professional use only. 17Thornburg Investment Income Builder Fund
Stock & Bond Yields from Identical Issuers
Top 10 Investment Positions: Equity Dividend Yield vs. Traded Debt Yield, Same Issuer
TRAILING 12-MONTH DIVIDEND CURRENT MARKET DEBT
YIELD (%) YIELD (%) SPECIFIC DEBT ISSUE
Taiwan Semiconductor Manufacturing Co. Ltd. 1.70 0.45 0.45% due 12/2030
Vodafone plc (EUR) 6.14 0.47 1.625% due 11/2030
Orange SA 6.66 0.48 1.625% due 4/2032
Samsung Electronics 3.24 1.60 7.70% due 10/1/2027
Deutsche Telekom 3.48 0.85 3.00% due 12/2032
China Mobile* 6.46 --- Net cash, no debt issued
Total SA 6.64 0.24 1.49% due 9/2030
Broadcom Inc. 3.11 2.60 4.11% due 9/2028
CME Group 2.91 1.88 3.75% due 6/2028
JPMorgan Chase & Co 2.36 1.45 1.04% due 2/2027
Past performance does not guarantee future results.
Source: Bloomberg, as of 4/6/2021 Debt Prices
*Dividend yields reflect announced intentions, or actual 2020 dividends paid as specific to the issuer.
Holdings can and do vary.
This material is for investment professional use only. 18Thornburg Investment Income Builder Fund
Selected World Market Index Returns
Total Returns (USD)
2015 2016 2017 2018 2019 2020 1Q21
USA: S&P 500 1.38% 11.96% 21.83% -4.38% 31.49% 18.40% 6.17%
USA: Russell 3000 Growth 5.09% 7.39% 29.59% -2.12% 35.85% 38.26% 1.19%
MSCI EAFE -0.81% 1.00% 25.03% -13.79% 22.01% 7.82% 3.48%
MSCI AC World ex-U.S. (Gross) -5.25% 5.01% 27.77% -13.78% 22.13% 11.13% 3.60%
MSCI AC World -2.36% 7.86% 23.97% -9.42% 26.60% 16.25% 4.57%
MSCI Emerging Markets -14.92% 11.19% 37.28% -14.58% 18.42% 18.31% 2.29%
EURO STOXX 50 -3.60% 1.75% 25.25% -15.61% 26.84% 6.01% 6.47%
MSCI AC Asia Pacific (All-Cap) -0.86% 4.82% 28.94% -14.16% 18.70% 19.16% 2.80%
Bloomberg Barclays U.S. Universal Bond 0.43% 3.91% 4.09% -0.25% 9.29% 7.58% -3.05%
Russell 2500 Growth Total Return -0.19% 9.73% 24.46% -7.47% 32.65% 40.47% 2.49%
Russell 2500 Total Return -2.90% 17.59% 16.81% -10.00% 27.77% 19.99% 10.93%
Past performance does not guarantee future results.
Source: MSCI, Bloomberg, Thornburg Investment Management
This material is for investment professional use only. 19Thornburg Investment Income Builder Fund
Investment Performance
AVERAGE ANNUAL TOTAL RETURNS (%) QTD YTD 1-YR 3-YR 5-YR 10-YR INCEPTION
A Shares TIBAX (Incep: 12/24/2002) 30-day SEC Yield: 2.55% | TTM Yield: 4.01%
Without sales charge 8.58 8.58 45.76 7.46 8.43 6.53 9.08
With sales charge 3.69 3.69 39.17 5.82 7.43 6.04 8.81
I Shares TIBIX (Incep: 11/3/2003)* 30-day SEC Yield: 2.89% | TTM Yield: 4.19%
8.62 8.62 46.06 7.72 8.73 6.85 8.55
Blended Index 2.82 2.82 38.96 11.07 10.94 8.45 8.19
Performance data shown represents past performance and is no guarantee of future results. Investment return and principal
value will fluctuate so shares, when redeemed, may be worth more or less than their original cost. Current performance may be
lower or higher than quoted. For performance current to the most recent month end, visit thornburg.com or call 877-215-1330.
The maximum sales charge for the Fund’s A shares is 4.50%. There is no up-front sales charge for class I shares.
*Prior to inception of this share class, performance is hypothetical and was calculated from actual returns of the class A shares adjusted for the expenses of the newer share class. Class I shares
may not be available to all investors. Minimum investments for the I share class may be higher than those for other classes. Returns for less than one year are not annualized.
The Blended Index is composed of 25% Bloomberg Barclays U.S. Aggregate Bond Index and 75% MSCI World Index.
This material is for investment professional use only. 20Thornburg Investment Income Builder Fund
Quarterly Total Returns
I Shares
25%
15%
5%
-5%
-15%
-25%
-35%
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
1Q17
3Q17
1Q18
3Q18
1Q19
3Q19
1Q20
3Q20
1Q21
Past performance does not guarantee future results.
Class I shares may not be available to all investors. Minimum investments for the I share class may be higher than those for other classes.
Returns for less than one year are not annualized.
This material is for investment professional use only. 21Thornburg Investment Income Builder Fund
Portfolio Characteristics
PORTFOLIO COMPOSITION REGIONAL EXPOSURE
Foreign Equity 49% % of Portfolio
North America 45.0%
Domestic Equity 34% Europe ex-U.K. 27.4%
Asia Pacific ex-Japan 13.3%
Domestic Other Bonds 5%
U.K. 10.3%
Domestic Corp Bonds 5%
Other 0.4%
Foreign Bonds 4% Latin America 0.2%
Japan 0.1%
Cash & Cash Equiv. 3%
Cash & Cash Equiv. 3.3%
0% 10% 20% 30% 40% 50%
Composition and regions are a percent of total portfolio. Percentages can and do vary.
Holdings are classified by country of risk as determined by MSCI and Bloomberg.
This material is for investment professional use only. 22Thornburg Investment Income Builder Fund
Flexibility with Fixed Income
We buy bonds when risk-adjusted returns are attractive.
50% 25%
45% IIB Cash & FI
40% U.S. HY: Yield to Worst 20%
Fixed Income as a Percent of Portfolio
35% European HY: Yield to Worst
30% 15%
Yield to Worst
25%
20% 10%
15%
10% 5%
5%
0% 0%
1Q03
3Q03
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
1Q17
3Q17
1Q18
3Q18
1Q19
3Q19
1Q20
3Q20
1Q21
Past performance does not guarantee future results.
Source: Bloomberg
This material is for investment professional use only. 23Thornburg Investment Income Builder Fund
Ten Largest Industry Groups
AS OF 3/31/2020 AS OF 3/31/2021
Telecommunication Services 19.8% Telecommunication Services 19.9%
Pharmaceuticals, Biotechnology & Life Sciences 14.1% Semiconductors & Semiconductor Equipment 12.6%
Diversified Financials 10.3% Diversified Financials 12.6%
Semiconductors & Semiconductor Equipment 9.2% Pharmaceuticals, Biotechnology & Life Sciences 10.8%
Energy 8.6% Banks 7.2%
Banks 5.5% Insurance 5.7%
Utilities 5.2% Tech Hardware & Equipment 5.5%
Insurance 4.6% Food & Staples Retailing 5.1%
Real Estate 4.1% Energy 4.7%
Materials 4.0% Materials 4.3%
Source: Bloomberg
Weights are percentages of equity. Portfolio holdings are subject to change daily.
This material is for investment professional use only. 24Thornburg Investment Income Builder Fund
Quarterly Distributions
Cents per I Share (TIBIX)
Q1 Q2 Q3 Q4 Total
2003 14.5¢ 14.5¢
2004 11.7¢ 13.6¢ 16.0¢ 22.7¢ 64.0¢
2005 11.6¢ 14.2¢ 18.0¢ 29.7¢ 73.5¢
2006 14.4¢ 18.0¢ 21.2¢ 35.0¢ 88.6¢
2007 16.2¢ 20.6¢ 23.6¢ 39.0¢ 99.4¢
2008 19.8¢ 23.8¢ 28.0¢ 38.3¢ 109.9¢
2009 19.2¢ 25.6¢ 29.4¢ 36.2¢ 110.4¢
2010 21.3¢ 26.7¢ 33.6¢ 37.8¢ 119.4¢
2011 22.7¢ 27.9¢ 33.8¢ 39.3¢ 123.7¢
2012 23.1¢ 27.5¢ 30.1¢ 37.8¢ 118.5¢
2013 23.0¢ 27.2¢ 26.8¢ 26.4¢ 103.4¢
2014 24.3¢ 25.9¢ 28.9¢ 27.9¢ 107.0¢
2015 18.2¢ 21.8¢ 21.8¢ 27.0¢ 88.9¢
2016 18.5¢ 20.2¢ 21.2¢ 23.3¢ 83.2¢
2017 18.6¢ 21.8¢ 27.9¢ 31.6¢ 99.9¢
2018 19.6¢ 21.6¢ 25.6¢ 29.6¢ 96.4¢
2019 20.3¢ 22.9¢ 26.4¢ 31.7¢ 101.3¢
2020 20.3¢ 20.1¢ 22.1¢ 30.3¢ 92.8¢
2021 23.7¢ 23.7¢
Past performance does not guarantee future results.
Class I shares may not be available to all investors. Minimum investments for the I share class may be higher than those for other classes.
Neither the payment of, or increase in, dividends is guaranteed.
This material is for investment professional use only. 25Thornburg Investment Income Builder Fund
Consistently Delivered a 4%+ Yield Since Inception
2003–2020
9% Dividend: 3.5% CAGR
8% NAV: 3.3% CAGR IIB Yield
7.9% Blended Index
7%
Bloomberg Barclays U.S. Corp
6% 6.6% 6.5% 6.6% CPI
5% 5.5%
5.0% 5.1% 5.0% 5.0%
4.8% 4.8%
4% 4.3% 4.4% 4.4%
4.2% 4.2% 4.2% 4.1%
3%
2%
1%
0%
-1%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Past performance does not guarantee future results.
Source: Bloomberg, as of 12/31/2020
The Compound annual growth rate (CAGR) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance,
assuming the profits were reinvested at the end of each year of the investment's lifespan.
Neither the payment of, or increase in, dividends is guaranteed. Annual Dividend Yields are calculated as annual dividend divided by the NAV.
Dividend Yield is 2003 TIBAX and 2004-2020 is TIBIX.
The Blended Index is composed of 25% Bloomberg Barclays U.S. Aggregate Bond Index and 75% MSCI World Index.
This material is for investment professional use only. 26Thornburg Investment Income Builder Fund
Historically, Dividends Have Been Important to Total Return (S&P 500 Index)
Over the long term, total shareholder returns (TSR) are roughly 50% price/50% dividends.
INCOME AS
PRICE INCOME TOTAL PERCENTAGE
DECADE APPRECIATION COMPONENT RETURN OF TOTAL RETURN
1871 – 1880 2.8% 6.1% 8.9% 68.5%
1881 – 1890 -2.1% 4.8% 2.6% 184.6%
1891 – 1900 4.2% 4.5% 8.7% 51.7%
1901 – 1910 2.5% 4.6% 7.1% 64.8%
1911 – 1920 -2.6% 6.1% 3.4% 179.4%
1921 – 1930 6.7% 5.6% 12.3% 45.5%
1931 – 1940 -2.8% 4.9% 2.1% 233.3%
1941 – 1950 6.7% 6.4% 13.0% 49.2%
1951 – 1960 10.2% 5.0% 15.2% 32.9%
1961 – 1970 4.7% 3.5% 8.2% 42.7%
1971 – 1980 4.0% 4.5% 8.5% 52.9%
1981 – 1990 9.3% 4.6% 13.9% 33.1%
1991 – 2000 14.9% 2.6% 17.5% 14.9%
2001 – 2010 -0.5% 1.9% 1.4% 135.7%
2011 – 2020 11.6% 2.3% 13.9% 16.7%
2021 - 1Q21 5.8% 0.4% 6.2% 6.4%
Average across Decades 4.6% 4.5% 9.1% 49.3%
Standard Dev across Decades 5.4% 1.4% 5.1%
Past performance does not guarantee future results.
Sources: Jack W. Wilson and Charles P. Jones, “An Analysis of the S&P 500 Index and Cowles’s Extensions: Price Indexes and Stock Returns, 1870–1999”, Journal of Business, 2002, vol. 75 no
3. Data after 1990 is from Bloomberg, Confluence, and FactSet. Calculated by Thornburg Investment Management. Returns are annualized.
This material is for investment professional use only. 27Thornburg Investment Income Builder Fund
Hypothetical $100,000 Investment
A Shares
INCOME TODAY: trailing 12-month yield = 4.0%
GROWTH IN INCOME: cumulative dividends total $145,643
CAPITAL APPRECIATION: $100,000 $205,693 = $105,693
$6,000 Market Value of Investment $500k
Quarterly Dividends $450k
$5,000
$400k
$350k
$4,000
Quarterly Dividend
$300k
Market Value
$3,000 $250k
$200k
$2,000
$150k
$100k
$1,000
2003: 2004: 2005: 2006: 2007: 2008: 2009: 2010: 2011: 2012: 2013: 2014: 2015: 2016: 2017: 2018: 2019: 2020: $50k
$4.2k $5.0k $6.0k $7.0k $8.0k $9.2k $9.4k $10.1k $10.4k $10.0k $8.6k $8.9k $7.3k $6.8k $8.3k $8.0k $8.5k $7.9k
$0 $0k
Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
Hypothetical illustrations above do not account for the fund’s sales charges. If sales charges had been included, results would be
lower. The portfolio values include any capital appreciation and capital gains payments, which were reinvested. Performance
data shown represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate
so shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than
quoted. For performance current to the most recent month end, visit thornburg.com or call 877-215-1330.
This material is for investment professional use only. 28Thornburg Investment Income Builder Fund
Hypothetical $100,000 with Reinvestment
A Shares
INCOME TODAY: trailing 12-month yield = 4.0%
GROWTH IN INCOME: cumulative dividends total $235,002
Beginning shares 8,375 Current shares 21,250
CAPITAL APPRECIATION: $153,748 + reinvested dividends $488,750*
$6,000 Market Value of Investment $600k
Quarterly Dividends
Quarterly Dividend Reinvested
$5,000 $500k
$4,000 $400k
Market Value
$3,000 $300k
$2,000 $200k
$1,000 $100k
2003: 2004: 2005: 2006: 2007: 2008: 2009: 2010: 2011: 2012: 2013: 2014: 2015: 2016: 2017: 2018: 2019: 2020:
$4.3k $5.2k $6.5k $7.9k $9.5k $11.4k $12.4k $14.2k $15.6k $16.0k $14.5k $15.8k $13.5k $13.2k $16.6k $16.8k $18.7k $18.0k
$0 $0k
Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
Hypothetical illustrations above do not account for the fund’s sales charges. If sales charges had been included,
results would be lower. All dividends and capital gains payments were reinvested. Performance data shown represents past
performance and is no guarantee of future results. Investment return and principal value will fluctuate so shares, when redeemed,
may be worth more or less than their original cost. Current performance may be lower or higher than quoted. For performance
current to the most recent month end, visit thornburg.com or call 877-215-1330.
*Includes initial investment of $100k
This material is for investment professional use only. 29Thornburg Investment Income Builder Fund
Ten Largest Holdings
AS OF 28-FEB-2021 % OF PORTFOLIO
Taiwan Semiconductor Manufacturing Co. Ltd. 5.3%
Orange S.A. 4.2%
Vodafone Group plc 4.2%
Samsung Electronics Co. Ltd. 3.9%
China Mobile Ltd.. 3.6%
Broadcom, Inc. 3.6%
Total SE 3.2%
CME Group, Inc. 3.1%
JPMorgan Chase & Co. 3.0%
Deutsche Telekom AG 2.9%
Weights are percentages of total portfolio. Holdings can and do vary.
This material is for investment professional use only. 30Thornburg Investment Income Builder Fund
A Solution That Consistently Seeks to Provide Attractive Income
Pay attractive yield today
KEY PILLARS Grow the dividend over time (subject to periodic fluctuations)
Long-term capital appreciation
Global dividend-paying stocks
INVESTIBLE UNIVERSE
Global bonds and hybrid securities
OBJECTIVE Focus on firms’ ability and willingness to pay dividends
There is no guarantee that the Fund will meet its investment objectives. Dividends are not guaranteed.
This material is for investment professional use only. 31www.thornburg.com Before investing, carefully consider the Fund’s investment goals, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, contact your financial advisor or visit thornburg.com. Read them carefully before investing. Not FDIC Insured. May lose value. No bank guarantee. Thornburg Funds are distributed by Thornburg Securities Corporation. 2300 North Ridgetop Road Santa Fe, New Mexico 87506 877-215-1330
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