Diversified Investment Strategy
No 1
Quarterly Investment Option Update
31 March 2015
AIM AND STRATEGY
To provide investors with moderate long term investment returns with the likelihood of fluctuations in the value
of their investment from year to year. The strategy will primarily invest in a diversified mix of defensive (30%)
and growth (70%) assets. Through extensive research, ipac has identified and selected specialist managers to
manage the day to day investments within each asset class.
INVESTMENT OPTION PERFORMANCE*
To view the latest investment performances please visit www.amp.com.au
INVESTMENT OPTION OVERVIEW
Investment category
Diversified - Balanced
Suggested
investment
timeframe
5 - 7 years
Relative risk rating
Medium
Investment style
Multi - Manager
Top 10 Australian Shares Exposure
%
Commonwealth Bank of Australia
9.7%
Westpac Banking Corp
7.9%
Australia & New Zealand Banking Group
6.7%
BHP Billiton Ltd
6.5%
National Australia Bank Ltd
5.8%
Telstra Corp Ltd
5.1%
Wesfarmers Ltd
3.0%
CSL Ltd
3.0%
Woolworths Ltd
2.4%
Woodside Petroleum Ltd
1.7%
Asset Allocation
Benchmark (%)
Range (%)
Top 10 International Shares Exposure
%
International shares
29
21-35
MICROSOFT CORP
1.2
Australian shares
30
25-39
VISA INC
1.0
Alternative assets
(growth)
HDFC BANK LTD
0.9
6
0-10
WELLS FARGO & COMPANY
0.9
Int’l listed property
2
0-12
CITIGROUP INC
0.9
Aust. listed property
3
0-12
GOOGLE INC
0.9
Alternative assets
(defensive)
4
0-10
UNION PACIFIC CORP
0.8
Fixed interest
24
0-40
NESTLE SA
0.8
Cash
2
0-30
APPLE INC
0.8
AMERICAN INTL GROUP
0.7
AMP Life Limited
ABN 84 079 300 379
Investment Option and Market Commentary
Over the last 12 months the fund has continued to deliver strong performance, as supportive monetary policy
continued to feature globally. Interest rate sensitive asset classes have continued to deliver above average
returns. Share markets had a particularly strong March quarter, which contributed markedly to the overall
return. All major asset classes performed strongly, with international shares being a standout. Exposure to
offshore currencies continued to support returns as the Australian dollar further declined in value, especially
relative to the US dollar. Many of our underlying investment managers again outperformed their benchmarks
over the period.
Fixed income
The multi-strategy fixed income sector again delivered strong returns and outperformed its benchmark over
the year, largely due to its exposure to corporate bonds issued by companies with strong fundamentals,
particularly in the US.
We continue to monitor the corporate bond sector closely, as the yield gap to government bonds has
narrowed in response to these favourable developments. Further, we will closely monitor the macroeconomic
climate, with particular regard to the potential for interest rate rises in the US.
Diversification through Real Assets
In April 2014 we created the Real Assets sector through a restructure of our investment in Australian property
trusts, global REITs and global listed infrastructure. This sector represents an important source of
diversification in our funds. This sector performed very strongly over the year as investors chased safe
sources of investment income.
Shares continue to rise off improving sentiment
Signs of slight improvements in some European economies, as well as a reasonably performing US economy
continued to support a good performance from our equity holdings, with international shares again leading the
way. The European Central Bank announced the start of its asset purchase program and has signaled
willingness to do what it takes to produce growth.
With the resource sector still a drag on the Australian market, financials drove a significant portion of domestic
returns. The ASX200 index continued its gains after the Reserve Bank of Australia (RBA) cut the official
interest rate by 0.25% to 2.25% early February. The interest cut continued to fuel the demand for high
dividend yield securities.
Outlook
Having now digested the reality that interest rates will eventually rise in the US, we anticipate further volatility
as the markets ponders the timeframe and rate at which these interest rate hikes may occur. While market
conditions are generally supportive for growth assets, we anticipate slightly lower returns over the period
ahead, given the very strong rises over the past months. As always, a well-managed basket of investments,
together with a patient and focused approach should pay-off the long term, while in the meantime, market
fluctuations and volatility can create opportunity to position for stronger future returns.
AMP Life Limited
ABN 84 079 300 379
Contact us
Web: www.amp.com.au
Phone: 133 267 - Monday to Friday 8.00am to 8.00pm EST
Email: [email protected]
What you need to know
This publication has been prepared by AMP Life Limited ABN 84 079 300 379, AFSL No. 233671 (AMP Life). The information contained in this publication
has been derived from sources believe to accurate and reliable as at the date of this document. Information provided in this investment option update are
views of the underlying Investment Manager only and not necessarily the views of the AMP Group. No representation is given in relation to the accuracy or
completeness of any statement contained in it. Whilst care has been taken in the preparation of this publication, to the extent permitted by law, no liability is
accepted for any loss or damage as a result of reliance on this information. AMP Life is part of the AMP Group. In providing the general advice, AMP Life and
AMP Group receives fees and charges and their employees and directors receive salaries, bonuses and other benefits.
The information in this document is of a general nature only and does not take into account your financial situation, objectives and needs. Before you make
any investment decision based on the information contained in this document you should consider how it applies to your personal objectives, financial
situation and needs, or speak to a financial planner.
The investment option referred to in this publication is available through products issued by AMP Superannuation Limited ABN 31 008 414 104, AFSL No.
233060 (ASL) and/or AMP Life. Before deciding to invest or make a decision about the investment options, you should read the current Product Disclosure
Statement for the relevant product, available from ASL, AMP Life or your financial planner.
Any references to the “Fund”, strategies, asset allocations or exposures are references to the underlying managed fund that the investment option either
directly or indirectly invests in (underlying fund). The investment option’s aim and strategy mirrors the objective and investment approach of the underlying
fund. An investment in the investment option is not a direct investment in the underlying fund.
Neither AMP Life, ASL, any other company in the AMP Group nor underlying fund manager guarantees the repayment of capital or the performance of any
product or particular rate of return referred to in this document. Past performance is not a reliable indicator of future performance.
AMP Life Limited
ABN 84 079 300 379