Transcript MLC MoM Quarterly Commentary Pack
MLC Investments Quarterly Preview Pack
Year ended 30
th
September 2009
Disclaimer
Any advice in this communication has been prepared without taking account of individual objectives, financial situation or needs. Because of this you should, before acting on any information in this communication, consider whether it is appropriate to your objectives, financial situation and needs. You should obtain a Product Disclosure Statement or other disclosure document relating to any financial product issued by MLC Investments Limited (ABN 30 002 641 661) and MLC Nominees Pty Ltd (ABN 93 002 814 959) as trustee of The Universal Super Scheme (ABN 44 928 361 101), and consider it before making any decision about whether to acquire or continue to hold the product. A copy of the Product Disclosure Statement or other disclosure document is available upon request by phoning the MLC call centre on 132 652 or on our website at mlc.com.au. An investment in any product offered by a member company of the National group does not represent a deposit with or a liability of the National Australia Bank Limited ABN 12 004 044 937 or other member company of the National Australia Bank group of companies and is subject to investment risk including possible delays in repayment and loss or income and capital invested. None of the National Australia Bank Limited, MLC Limited, MLC Investments Limited or other member company in the National Australia Bank group of companies guarantees the capital value, payment of income or performance of any financial product referred to in this publication.
Past performance is not indicative of future performance. The value of an investment may rise or fall with the changes in the market. Please note that all return figures reported are before management fees and taxes, and for the period up to 30 June 2009, unless otherwise stated. The specialist investment management companies are current as at 30 June 2009. Funds under management figures are as at 30 June 2009, unless otherwise stated. Investment managers are regularly reviewed and may be appointed or removed at any time without prior notice to you.
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Contents
• The recent environment • Impact on asset class returns • Impact on MLC multi-manager funds • The global outlook • Enduring investment principles revisited Slide no.
The view through the rear view mirror still looks awful
US Eurozone
Annual growth in real GDP % 0 -2 -4 -6 6 4 2 Q1 1999 Q1 2002 Q1 2005 Q1 2008 Annual growth in real GDP % 2 0 -2 -4 -6 6 4 Q1 1999 Q1 2002 Q1 2005 Q1 2008 5
Japan
Annual growth in real GDP % 0 -5 -10 Q1 1999 Q1 2002 Q1 2005
Source: Datastream
Q1 2008
UK
Annual growth in real GDP % 6 0 -2 -4 -6 4 2 Q1 1999 Q1 2002 Q1 2005 Q1 2008
The windscreen looks much better..
US leading indicators and industrial
6 mthly % change
production
0 -2 -4 -6 -8 8 6 4 2 -10 -12 Aug-99
Industrial output Leading indicator
Aug-01 Aug-03 Aug-05 Aug-07 Aug-09 5
Euro-area leading indicators and industrial production
6 mthly % change 0 -5 -10
Industrial output Leading indicator
-15 Aug-99 Aug-01 Aug-03 Aug-05 Aug-07 Aug-09
Japanese leading indicators and industrial production
6 mthly % change 10 5 0 -5 -10 -15 -20 -25 -30 -35 Aug-99 Aug-01
Industrial output Leading indicator
Aug-03 Aug-05 Aug-07 Aug-09
Source: Datastream
UK leading indicators and industrial production
6 mthly % change 4 2 0 -2 -4 -6 -8 -10 -12 Aug-99
Industrial output
Aug-01 Aug-03
Leading indicator
Aug-05 Aug-07 Aug-09
The emerging world is powering along!
The Stress index is based on external debt, budget deficit, credit growth vs GDP, and the current A/c balance. Periods of high stress for emerging markets explain poor absolute and relative economic performance vs the developed world.
What a difference 6 months makes!
Gross Asset Class Returns -10% -20% -30% -40% -50% 40% 30% 20% 10% 0%
*
-60% Aust'n Shares Global Shares (Hedged) Global Shares (Unhedged) Em. Mkts shares A-REITs Global REITs (Hedged) Aust'n Nom.
bonds Global Nom.
Bonds Global High Yield Bonds (Hedged) Aust'n CPI bonds 3-Months to Sept 2009 1 Year to March 2009 1 Year to Sept 2009 Index data source:
S&P/ASX 300, MSCI All Countries (hedged), MSCI All Countries, MSCI Emerging Markets, S&P/ASX 200 LPT, UBS Global REIT (hedged), UBS Composite Bond (all mats), BCGA Global Agg (hedged), BCGA US Corp HY BB/B (hedged), UBS Inflation Linked Bonds (all mats), UBS Australian Bank Bill respectively.
Cash
Significant positive impact on your MLC Horizon Portfolio
30% 20% 10% 0% -10% -20% -30% -40% -50% MLC Horizon 1 MLC Horizon 2 MLC Horizon 3 MLC Horizon 4 MLC Horizon 5 MLC Horizon 6 MLC Horizon 7 MLC LTAR Year to 31 March 2009 Year to 30 September 2009 3 months to September 2009
Returns quoted are for the MLC Super Fundamentals Horizon series and are net of admin fees, issuer fees, investment fees and super tax, but before the deduction of entry/exit fees and policy charges.
Even greater impact at the MLC Sector Fund level!
30% 20% 10% 0% -10% -20% -30% -40% -50% -60% MLC Global Share fund MLC Hedged Global share fund MLC IncomeBuilder MLC Aust'n Share fund MLC Prop Sec fund MLC Hedged Global Prop fund MLC Div'd Debt fund MLC Cash Fund Year to 31 March 2009 Year to 30 September 2009 3 months to 30 September 2009
Returns quoted are for the MLC Super Fundamentals sector funds and are net of admin fees, issuer fees, investment fees and super tax, but before the deduction of entry/exit fees and policy charges.
Disciplined rebalancing & daily dollar cost averaging has contributed to your recovery
Value of $100 invested in MLC Super GS Horizon 4 Balanced Portfolio on 24th Sept 1999, Net of super tax and all Retail fees $200 $180
22 nd Jan, 3 rd July, 9 th Oct and 19 th Nov: Maintained your portfolio strategy by selling bonds and buying Aust’n & global shares.
$160 $140 $120 $100
7th April, 11th June, 31st July and 14th Aug: Maintained your portfolio strategy by selling Aust’n shares & buying bonds and global shares.
$80 24 -Se p -9 9 r-0 0 24 -Ma 24 -Se p -0 0 r-0 1 24 -Ma 24 -Se p -0 1 24 -Ma r-0 2 24 -Se p -0 2 24 -Ma r-0 3 24 -Se p -0 3 24 -Ma r-0 4 24 -Se p -0 4 24 -Ma r-0 5 24 -Se p -0 5 24 -Ma r-0 6 24 -Se p -0 6 24 -Ma r-0 7 24 -Se p -0 7 24 -Ma r-0 8 24 -Se p -0 8 24 -Ma r-0 9 24 -Se p -0 9
Returns based on MLC Super GS Horizon 4 Balanced Portfolio and are net of management fees which include administration fees, issuer fees and investment fees and any Super tax payable, but do not take into account entry/exit fees or policy charges.
Rethinking emerging markets: more than one way to skin a cat?
Theme
Consumption growth Communications & media Financial services Health care
Company Country of listing Key EM feature
Switzerland (Developed) South Africa (EM) EMs achieved organic sales growth of 15.4% in 2008 and represents about 35% in volume (CHF 35 billion).
Multinational electronic media company with 70% of revenue from South Africa.
UK (Developed) 90% of profit from Asia, Africa and Middle East.
USA (Developed) China's largest medical equipment manufacturer with a home customer base.
Source: Company Specific Reports
The Global Outlook
• • • • • • • Worst of the crisis
over
, but the recession is not.
Economic recovery is going to be
VERY
subdued – consumers (especially in the English speaking world) will take time to repair balance sheets, re build savings Australia has been late into this…more bad news to come on employment, trade, investment.
Prospects for the emerging economies are brighter than they’ve been for many years Interest rates likely to stay lower for longer – world’s central banks won’t mind a bit more inflation?
Investment returns in this recovery are likely to be more modest than we’ve been used to
How long before memories fade? Longer this time than usual!
Enduring investment principles
• Run your own race • Be sensible about your return expectations • Diversification is your friend • Minimise realised losses • Its time IN the market not TIMING the market • Take advantage of the magic of compounding • Dollar cost average to minimize regret • Be contrarian • Be patient • Talk to your financial planner regularly