Transcript MLC MoM Quarterly Commentary Pack

MLC Investments
Quarterly Preview Pack
Year ended 30th 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.
Contents
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3
The recent environment
Impact on asset class returns
Impact on MLC multi-manager funds
The global outlook
Enduring investment principles revisited
Slide no.
4
7
8
13
14
The view through the rear view mirror still
looks awful
US
Annual growth in real GDP %
6
4
2
0
-2
-4
-6
Q1 1999
Q1 2002
Q1 2005
Eurozone
Q1 2008
Japan
5
0
-5
Q1 2002
Source: Datastream
Q1 2005
Q1 2008
UK
Annual growth in real GDP %
-10
Q1 1999
Annual growth in real GDP %
6
4
2
0
-2
-4
-6
Q1 1999
Q1 2002
Q1 2005
Q1 2008
Annual growth in real GDP %
6
4
2
0
-2
-4
-6
Q1 1999
Q1 2002
Q1 2005
Q1 2008
The windscreen looks much better..
US leading indicators and industrial
production
6 mthly % change
8
6
4
2
0
-2
-4
-6
-8
-10
-12
Aug-99
5
6 mthly % change
0
-5
Industrial output
Industrial output
-10
Leading indicator
Leading indicator
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
Euro-area leading indicators and
industrial production
Leading indicator
Aug-03
Source: Datastream
Aug-01
Aug-03
Aug-05
Aug-07
Aug-09
UK leading indicators and industrial
production
6 mthly % change
Industrial output
Aug-01
-15
Aug-99
Aug-05
Aug-07
Aug-09
4
2
0
-2
-4
-6
-8
-10
Industrial output
-12
Aug-99 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
40%
30%
20%
10%
0%
-10%
-20%
-30%
*
-40%
-50%
-60%
Aust'n
Shares
Global
Shares
(Hedged)
Global
Shares
(Unhedged)
Em. Mkts
shares
A-REITs
3-Months to Sept 2009
Global REITs Aust'n Nom.
(Hedged)
bonds
1 Year to March 2009
Global Nom.
Bonds
Global High
Yield Bonds
(Hedged)
Aust'n CPI
bonds
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%
Total Returns (% p.a.)
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
MLC
Horizon 1
MLC
Horizon 2
Year to 31 March 2009
MLC
Horizon 3
MLC
Horizon 4
MLC
Horizon 5
Year to 30 September 2009
MLC
Horizon 6
MLC
Horizon 7
MLC LTAR
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%
Total Return (% p.a.)
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
-60%
MLC Global
Share fund
MLC Hedged
MLC
Global share IncomeBuilder
fund
Year to 31 March 2009
MLC Aust'n
Share fund
MLC Prop Sec MLC Hedged MLC Div'd Debt
fund
Global Prop
fund
fund
Year to 30 September 2009
MLC Cash
Fund
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
$160
22nd Jan, 3rd July, 9th Oct and 19th Nov:
Maintained your portfolio strategy by selling
bonds and buying Aust’n & global shares.
$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.
24
-S
e
24 p-9
-M 9
a
24 r-0
0
-S
ep
24
-M 00
a
24 r-0
1
-S
ep
24
-M 01
a
24 r-0
2
-S
ep
24
-M 02
a
24 r-0
3
-S
ep
-0
24
-M 3
a
24 r-0
4
-S
ep
24
-M 04
a
24 r-0
5
-S
ep
24
-M 05
a
24 r-0
6
-S
ep
-0
24
-M 6
a
24 r-0
7
-S
ep
24
-M 07
a
24 r-0
8
-S
ep
24
-M 08
a
24 r-0
9
-S
ep
-0
9
$80
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
Company
Consumption
growth
Communications
& media
Financial
services
Health care
Source: Company Specific Reports
Country of listing
Key EM feature
Switzerland
(Developed)
EMs achieved organic sales growth
of 15.4% in 2008 and represents
about 35% in volume (CHF 35
billion).
South Africa (EM)
Multinational electronic media
company with 70% of revenue from
South Africa.
UK (Developed)
USA
(Developed)
90% of profit from Asia, Africa and
Middle East.
China's largest medical equipment
manufacturer with a home customer
base.
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, rebuild 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