1. ipac Investment Briefing
Jeff Rogers – Chief Investment Officer, ipac
Nick Schoenmaker – Portfolio Specialist, AMP Capital
October 2015

2. Important information
ipac asset management limited (ABN , AFSL ) (ipac) is the responsible entity of each of the Pathways portfolios (each a “Fund”) and the issuer of the units in the Funds. This document has been prepared by AMP Capital Investors Limited (ABN , AFSL ) (AMP Capital), which has been appointed to provide Fund-related services to ipac. To invest in the Fund, investors will need to obtain the current ipac Pathways offer document from the AMP Limited website (amp.com.au). The offer document contains important information about investing in the Fund and it is important that investors read the offer document before making a decision about whether to acquire, or continue to hold or dispose of units in the Fund.
Neither AMP Capital, ipac nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this document. Past performance is not a reliable indicator of future performance.
While every care has been taken in the preparation of this document, neither AMP Capital, ipac nor any other member of the AMP Group makes any representation or warranty as to the accuracy or completeness of any statement in it including without limitation, any forecasts. This document has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of the information in this document, and seek professional advice, having regard to their objectives, financial situation and needs.
This presentation has been prepared for distribution to professional financial advisers only and is intended to provide general information. It is not intended to be distributed or made available to existing or potential investors.
Asset allocations and investment programs may change from time to time from those stated in this presentation. For current allocations and investment programs please contact us.

3. Agenda What happened in the market over the year and quarter
Portfolio performance
International shares update
Outlook and opportunities

4. Markets fall in September quarter
Past performance is not a reliable indicator of future performance.
Source: Bloomberg, as at 30 September 2015

5. Market volatility returns
Improved conditions in the US economy led to expectations of a rate rise, impacting interest rate sensitive sectors
A rising US dollar impacts the financial position of emerging economies and generates negative feedback to earnings
China is attempting a challenging transition from manufacturing exports towards consumption
Uncertainty around the trajectory of growth and policy management lead to exaggerated market volatility
Source: AMP Capital and Bloomberg. As at 30 September 2015

6. Commodity exposures
Commodity prices have fallen sharply due to boom in resource sector investment and structural deceleration in Chinese demand
Economies, currencies and markets exposed to commodities under-performed
Source: AMP Capital and Bloomberg. As at 30 September 2015

7. Portfolio Performance

8. Performance of balanced portfolio – Pathways 70
Value of $100 investment
Past performance is not a reliable indicator of future performance
Source: AMP Capital, as at 30 September 2015

9. Portfolio performance as at 30 September 2015
returns net of fees (%)
Pathways 30 70 85
Pathways 95
Pathways Value
3 months
-0.9
-2.6
-3.3
-3.8
-2.3
1 year
3.5
4.9
5.4
5.7
4.3
3 years (p.a.)
6.6
11.0
12.7
13.9
9.9
5 years (p.a.)
6.5
8.7
9.5
10.0
8.2
Past performance is not a reliable indicator of future performance
Source: AMP Capital, as at 30 September Returns are shown after fees and before tax for class K units and assuming dividends are re-invested. Performance is annualised for periods greater than one year.

10. Portfolio performance as at 30 September 2015
returns net of fees (%)
Life Choices active 50
Life Choices active 70
Life Choices active 85
Life Choices active 100
Income Generator
Alternative Balanced
Premium Growth
3 months
-1.7
-2.6
-3.3
-4.0
-0.9
-2.1
-4.9
6 months
-4.1
-5.5
-6.4
-7.4
-3.7
-3.9
-6.0
1 year
4.6
5.1
5.4
5.5
5.7
4.9
1.8
3 years (p.a.)
9.2
11.4
12.8
14.3
9.4
10.5
10.9
sourced from AXA Select worksheet… Premium Growth, Classic Enhanced Growth – class L
Past performance is not a reliable indicator of future performance
Source: AMP Capital, as at 30 September Returns are shown after fees and before tax for class K units and assuming dividends are re-invested. Performance is annualised for periods greater than one year.

11. Classic Enhanced Growth
Portfolio performance as at 30 September 2015
returns net of fees (%)
Classic 1
Classic 2
Classic 3
Classic Value
Classic Enhanced Growth
3 months
-1.1
-2.8
-3.6
-2.3
-4.9
1 year
3.0
4.2
3.9
1.8
3 years (p.a.)
6.2
10.4
11.8
9.2
10.9
5 years (p.a.)
6.1
8.2
8.7
7.7
Past performance is not a reliable indicator of future performance
Source: AMP Capital, as at 30 June Returns are shown after fees and before tax for class K units and assuming dividends are re-invested. Performance is annualised for periods greater than one year.

12. performance versus peers
Competitive performance over the longer term
performance versus peers
Pathways
3 months
1 year
2 years
3 years
5 years 30
3rd
2nd
1st 70 85 95
Past performance is not a reliable indicator of future performance
Source: Mercer, as at 30 September Survey of Retail – Conservative, Balanced Growth, High Growth and All Growth universes

13. Key performance drivers
How asset allocation decision impacted performance
currency positions
added value over the year weaker Australian dollar against the US dollar
low exposure to government bonds in favour of corporate bonds
detracted over the quarter due to rise in economic uncertainty
listed infrastructure
detracted value over quarter due to rising rate expectations
Active management has been a solid source of value add over the year
Global shares sector over the year
Australian shares sector added value over quarter and year

14. Change of international manager

15. International shares – diversification of styles and strategies
Our international shares portfolio is well diversified across styles and strategies
We believe a diversified portfolio of quality companies with reasonable valuations can deliver solid outperformance over time
The strategy provides diversification relative to the other global shares strategies we utilise, such as those focussed on thematic growth and those with exposure to companies whose earning potential is temporarily undervalued in the market
e.g. Quality Growth
Style neutral - quantitative
EIT
Arrowstreet
Harding Loevner
Carnegie
LSV
Pzena
Growth
Value
Quality Thematic / Risk seeking
Source: AMP Capital. The above schematic is for the large cap all country global shares managers. The portfolio also has a discrete allocation to Arrowstreet and GMO to manage the small cap and emerging markets sectors respectively.

16. International shares – manager change
Background
Harding Loevner was appointed to the international shares strategy in 2011 to manage a mandate providing exposure to quality companies, and it has contributed positively by providing the portfolio with stable long-term earnings growth.
After a recent review we have decided to withdraw the mandate from Harding Loevner and allocate the capital to a new mandate with Dimensional Fund Advisors (‘Dimensional’). While we continue to believe that with Harding Loevner is a high quality fund manager, we have concluded that Dimensional’s approach will deliver a more reliable and cost-effective exposure to high quality companies.
Dimensional uses information in market prices, combined with fundamental data, to systematically identify differences in expected returns among securities in a cost effective manner
Summary
Withdrawing the global shares mandate managed by Harding Loevner
Allocating the capital to a new mandate with Dimensional Fund Advisors
Source: AMP Capital

17. Outlook and opportunities

18. Economic backdrop Adequate global growth
Uncertainty sourced in China and emerging economies
US Economy growth acceptable
Europe improving off a low base
Inflation
Well contained globally
Monetary policy
Likely rise in US interest rates is well-telegraphed
Australian interest rates likely to be held low for an extended period
Further stimulus likely in Europe and Japan
Fiscal policy
Investors are beginning to ponder the limitations of monetary policy
Key focus will be on the ability of leaders to develop and then deliver credible policies

19. Markets - debt
Bond prices likely to come under some further pressure as US interest rates begin to normalise
Yield levels remaining well below their long-term historical average
‘Safe assets’ offer below average reward for risk
Corporate bond valuations have improved over the past 6 months

20. Markets - equities
United States
Strength of US$ is crimping earnings from multi-national companies
Despite a modest uptick, wage growth remains tepid
Expect more subdued returns over the period ahead
Australia
Commodity oversupply hurts earnings of mining companies
Wage costs decelerating but earnings struggling to grow as corporates lack pricing power
Lower A$ and easier monetary conditions should represent a tail-wind going forward
Valuations have improved over the quarter
Asia
Heightened volatility likely to continue
Europe
Stimulus program in place until Q3 2016, with capacity to extend if necessary
This is likely to support asset values
Valuations are more attractive than the US

21. PEs somewhat above average are sustainable
Past performance is not a reliable indicator of future performance
Source: Thomson Reuters, MSCI as at 30 June 2015

22. Australian equity yields remain stable
Sub 3% from since February 2015
Past performance is not a reliable indicator of future performance
Source: Bloomberg as at 30 September 2015

23. Takeaways
Ongoing volatility stemming from emerging economies, China and the US Fed
US interest rates to begin to rise, although likely end up at lower levels than historical averages
Global growth is adequate
US continues to lead
European stimulus only modestly successful so far
Abe needs to drive reform agenda
China continues to manage a challenging a challenging economic transition to allow for a more stable growth rate.
Challenging global outlook for emerging economies
Australia growth is lacklustre, national income is stagnating due to fall in commodity prices
Prospective returns from equities have improved, though still a little below long-term averages
Equities are preferred relative to bonds and cash
Expect solid return for diversified funds largely driven by equity and real asset exposures
Average rate of growth in unit prices likely to be lower than the previous three years