Presentation on theme: "1 The Chaser. 2 General advice warning and disclaimer Any opinions expressed in this presentation constitute our judgement at the time of issue and are."— Presentation transcript:
2 General advice warning and disclaimer Any opinions expressed in this presentation constitute our judgement at the time of issue and are subject to change. We believe that the information contained in this presentation is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made as at the time of compilation. However, no warranty is made as to their accuracy or reliability (which may change without notice) or other information contained in this presentation. To the maximum extent permitted by law, we disclaim all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from this presentation. This presentation contains general information and may constitute general advice. It does not take into account any person’s particular investment objectives, financial situation or individual needs. It should not be relied upon as a substitute for financial or other specialist advice. It has been prepared solely as an information service for financial advisers and should not be distributed to clients. Before making any decisions on the basis of this presentation, you should consider the appropriateness of its content having regard to your particular investment objectives, financial situation or individual needs. Opinions expressed constitute our judgement at the time of issue and are subject to change. The presenter is a representative of MLC Investments Limited. MLC Investments Limited ABN 30 002 641 661 105-153 Miller Street, North Sydney NSW 2060 is a member of the National group of companies. MLC Investments Limited is the issuer of the MLC MasterKey Unit Trust. Information about the MLC MasterKey Unit Trust is contained in the current Product Disclosure Statement (‘PDS’), copies of which are available upon request by phoning MLC on 131 831 or on our website at mlc.com.au.
3 The following charts show the advantage of being in a long term strategic balanced fund as opposed to “chasing” the best returning asset class. About ‘The Chaser’
4 If you had invested in The Chaser portfolio over the last 107 years you would have substantially underperformed a typical Strategic Balanced portfolio. The value of $100 invested in each portfolio in December 1901 would today be $298,685 and $2,014,565 respectively. The annual compound return of The Chaser portfolio would have been 7.8%p.a. whilst the Strategic Balanced portfolio would have returned 9.7%p.a. This shows the incredible power of compounding over long periods of time: a difference of 1.9% p.a. corresponds to $1,715,880 over the 107 year period. Key Points
5 The Chaser vs a Strategic Balanced Portfolio The returns outlined above represent historical performance only. (on data used in this slide)
6 The same information is shown in the following chart using a logarithmic scale. A logarithmic scale is a scale of measurement that uses the logarithm of a physical quantity instead of the quantity itself. Presentation of data on a logarithmic scale can be helpful when the data covers a large range of values – the logarithm reduces this to a more manageable range.
7 The Chaser vs a Strategic Balanced Portfolio The returns outlined above represent historical performance only. (on data used in this slide)
8 The next chart presents the value of $100,000 invested in December 1978 to show how chasing performance and compounding can impact your portfolio over a timeframe more relevant to superannuation investors, 30 years. The Chaser portfolio has a value of $2,359,801 at the end of 2008, a compound annual return of 11.1%p.a. whilst the Strategic Balanced portfolio stands at $3,577,206, a compound annual return of 12.7%p.a.
9 The Chaser vs a Strategic Balanced Portfolio The returns outlined above represent historical performance only. (on data used in this slide)
10 The following slides shows the annual performance of each asset class since 1901. The annual performance of The Chaser Portfolio and a Strategic Balanced Portfolio and the corresponding value of $100 invested in each portfolio at the beginning of the period are also shown.
11 The Chaser vs a strategic balanced portfolio December 1901 – December 1920
12 The Chaser vs a strategic balanced portfolio December 1920 – December 1940
13 The Chaser vs a strategic balanced portfolio December 1940 – December 1960
14 The Chaser vs a strategic balanced portfolio December 1960 – December 1980
15 The Chaser vs a strategic balanced portfolio December 1980 – December 2000
16 The Chaser vs a strategic balanced portfolio December 2000 – December 2008
17 Source information: The performance of the Chaser portfolio is calculated so that in any given year the Chaser is invested 100% in the best performing asset class of the previous year. The Strategic Balanced fund is constructed using the asset allocation of the Median Manager in the Mercer Pooled Fund Survey as at 30 June 2008. The asset allocation is as follows: Asset ClassMedian ManagerReweighted Australian Equity41.7%43.6% Global Equity (unhedged)23.2%24.3% Australian Bonds15.7% 16.4% Global Bonds Hedged7.3%7.6% Cash7.7%8.1% Other4.4%-  34.6% Australian equity + 7.1% Australian listed property  14.9% Australian bonds + 0.8% inflation-linked bonds Index returns are data presented in DMS Data Module offered through the Ibbotson Associates’ software program EnCorr. Based on copyrighted books by Dimson, Marsh, and Staunton, Triumph of the Optimists, Princeton University Press, (c) 2002, and Global Investment Returns Yearbook 2003, ABN AMRO/London Business School (c) 2003. All rights reserved. Used with permission. (back )
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