IPS Enhanced Index 30 Quarterly Report As of 31/12/2018 Fourth quarter 2018 Global equity markets experienced one of their worst quarters since the Global Financial Crisis while cash and bonds made a comeback after a decade of ultra-low returns. Trump s trade war agenda with China, coupled with rising interest rates in the United States (US) and political turmoil globally formed layers upon layers of uncertainty for investors resulting in a mass movement towards defensive securities with more predictable returns. The consequences of these market movements were devastating for equity returns and investor confidence. Few Australian portfolios walked away unscathed. Pleasingly, your model portfolio stood strong during this period of heightened volatility. While the quarterly return is negative, it was one of the best performing portfolios in Australia within its respective universe of providers in Morningstar, a global data provider. The key positioning imbedded in your portfolio ensured capital was preserved keeping losses to a minimum. Due to its defensive qualities in maintaining value during down market periods, the allocation to the Vanguard Global Infrastructure Index Fund assisted in offsetting the largest detractor to performance, the Vanguard International Shares Index Fund. This fund consists 63.2 of US shares which experienced their worst performing December since the Great Depression in the 1930s. Additionally, while Australia s S&P/ASX 300 Index was the best performing developed global equity index for December, it wasn t enough to sufficiently recover from a tough quarter resulting in the Vanguard Australian Shares Index Fund contributing to your portfolio s quarterly negative return. However, due to our concerns surrounding the limited capacity for sustainable economic growth in Australia caused by severe household debt, a weakening housing market and rising mortgage rates, there is an active underweight to this asset class. Consequently the blow of the fund s underperformance was minimised considerably through careful portfolio positioning. Justin McLaughlin Chief Investment Officer Jessica Schlosser Investment Analyst Sam Alaaeddin Investment Analyst
IPS Enhanced Index 30 Portfolio objective As of 31/12/2018 The IPS Enhanced Index 30 model is a portfolio of actively managed assets designed to achieve stable returns over the short to medium term. Performance Since Inception (p.a)** 5 years (p.a.) 3 years (p.a.) 1 year (p.a.) 6 months () 3 months () 1 month () Total Return Volatility 5.7 4.9 4.6 1.3-0.3-1.7 2.6 2.7 2.4 2.1 0.8-0.2 **Inception Date: 1/06/2012 Growth of $100 invested at inception ^ Time Period: 2/06/2012 to 31/12/2018 152.5 145.0 137.5 130.0 122.5 115.0 107.5 100.0 92.5 2012 2013 2014 2015 2016 2017 2018 ^ Performance data is after fund manager fees, but before any other applicable fees or taxes and assumes the reinvestment of dividends. Past performance is not indicative of future performance. Due to the flexibility of rebalancing and variations between accounts, performance shown is indicative only and assumes rebalancing occurs at the end of each calendar month, and also assumes that there are no deposits, withdrawals nor exceptions to regular rebalancing in the model portfolio. Return and risk vs. peer group Time Period: 1/01/2014 to 31/12/2018 Peer Group (5-95): Open End Funds - Australia - Multisector Moderate 6.0 5.0 4.0 3.0 Return () 2.0 1.0 0.0 0.0 1.0 2.0 3.0 4.0 5.0 What is a risk and return chart? The chart to the left shows the returns and associated risk of the model portfolio (darker shape) against its peers (light grey circles), over the past 5 years. The past 5 years return (as a percentage) is shown on the vertical axis. The risk (as measured by the standard deviation) of the investment over the past 5 years is shown on the horizontal axis. Risk Underlying funds APIR Code Global Broad Category Group Portfolio Weighting CFML Fixed Interest CFML Cash Vanguard Australian Shares Index Vanguard International Shares Index Vanguard Global Infrastructure Index Vanguard Emerging Markets Shares Index NRM0030AU Fixed Income 50.00 NRM0026AU Money Market 20.00 VAN0002AU Equity 8.00 VAN0003AU Equity 8.00 VAN0023AU Equity 7.50 VAN0005AU Equity 6.50 Page 1 of 4
IPS Enhanced Index 30 Performance of current underlying funds 5 Yr (pa) 3 Yr (pa) 2 Yr (pa) 1 Yr () 6 Mth () 3 Mth () 1 Mth () CFML Fixed Interest 4.07 3.23 2.74 1.26 0.99 0.43 0.38 CFML Cash 1.86 1.60 1.50 1.56 0.94 0.50 0.22 Vanguard Australian Shares Index 5.42 6.46 4.05-3.17-7.06-8.43-0.26 Vanguard International Shares Index 9.93 7.55 7.36 1.52-4.52-11.08-4.31 Vanguard Global Infrastructure Index 10.63 9.67 8.18 9.68 2.86-1.63-1.92 Vanguard Emerging Markets Shares Index 6.13 10.04 9.24-5.69-4.63-5.19 0.66 Asset class breakdown Cash 21.6 Australian Equities 8.0 Australian Fixed Interest 41.9 International Fixed Interest 6.9 International Equities 21.6 Equities: Market capitalisation Equities: Geographical exposure Giant 43.2 Large 39.4 Mid 14.9 Small 2.1 Micro 0.3 North America 36.5 Latin America 2.7 United Kingdom 2.5 Europe developed 5.8 Europe emerging 1.3 Africa/Middle East 1.8 Australasia 27.1 Japan 4.4 Asia developed 7.1 Asia emerging 10.7 Equities: Industry exposure Fixed Interest: Credit quality Energy 7.8 Industrials 13.0 Consumer Staples 5.1 Financials 18.4 Communication Services 6.7 Utilities 14.8 Materials 7.7 Consumer Discretionary 6.9 Healthcare 6.6 Information Technology 7.8 Real Estate 5.3 AAA 40.0 AA 7.4 A 18.3 BBB 30.2 BB 2.6 B 0.6 Not Rated 0.8 Page 2 of 4
Top holdings of the underlying infrastructure, property and equity funds Vanguard Global Infrastructure Index - Top Holdings Portfolio Date: 30/11/2018 Sector Portfolio Weighting Union Pacific Corp NextEra Energy Inc American Tower Corp Duke Energy Corp Canadian National Railway Co CSX Corp Enbridge Inc Dominion Energy Inc Norfolk Southern Corp Southern Co Industrials 6.01 Utilities 4.52 Communication Services 3.81 Utilities 3.34 Industrials 3.34 Industrials 3.14 Energy 3.13 Utilities 2.57 Industrials 2.55 Utilities 2.53 Vanguard Australian Shares Index - Top Holdings Sector Portfolio Weighting Commonwealth Bank of Australia BHP Group Ltd Westpac Banking Corp CSL Ltd Australia and New Zealand Banking Group Ltd National Australia Bank Ltd Woolworths Group Ltd Wesfarmers Ltd Macquarie Group Ltd Telstra Corp Ltd Financial Services 8.26 Basic Materials 6.53 Financial Services 5.57 Healthcare 5.43 Financial Services 4.59 Financial Services 4.26 Consumer Defensive 2.50 Consumer Defensive 2.37 Financial Services 2.23 Communication Services 2.20 Vanguard International Shares Index - Top Holdings Sector Portfolio Weighting Apple Inc Microsoft Corp Amazon.com Inc Johnson & Johnson JPMorgan Chase & Co Alphabet Inc Class C Facebook Inc A Alphabet Inc A Exxon Mobil Corp Berkshire Hathaway Inc B Technology 2.18 Technology 2.12 Consumer Cyclical 1.78 Healthcare 0.99 Financial Services 0.94 Technology 0.93 Technology 0.91 Technology 0.90 Energy 0.83 Financial Services 0.76 Page 3 of 4
Top holdings of the underlying infrastructure, property and equity funds Vanguard Emerging Markets Shares Index - Top Holdings Sector Portfolio Weighting Tencent Holdings Ltd Taiwan Semiconductor Manufacturing Co Ltd Alibaba Group Holding Ltd ADR Samsung Electronics Co Ltd Naspers Ltd Class N China Construction Bank Corp H China Mobile Ltd Industrial And Commercial Bank Of China Ltd H Ping An Insurance (Group) Co. of China Ltd H Reliance Industries Ltd Technology 4.77 Technology 3.76 Consumer Cyclical 3.69 Technology 3.47 Technology 1.83 Financial Services 1.65 Communication Services 1.23 Financial Services 1.04 Financial Services 0.96 Energy 0.95 Important Information In relation to the SMA, this document is issued by ClearView Financial Management Ltd (CFML) ABN 99 067 544 549 AFSL 227677 as the Operator of ClearView Investments, an Investor Directed Portfolio Service. In relation to the IPS, this document is issued by ClearView Life Nominees Pty Ltd (CLN) ABN 37 003 682 175 AFS 227683 as Trustee for the ClearView Retirement Plan ABN 45 828 721 007 which includes ClearView Superannuation and Retirement Income, USI 45 828 721 007 001. CLN and CFML together are referred to as ClearView. This document is not intended to represent investment or professional advice. This information does not take into account your individual objectives, financial circumstances or needs. You should assess whether the information is appropriate for you, having regard to your objectives, financial circumstances and needs. You should consider the disclosure documents when deciding whether or not to acquire or to continue to hold the investment. No representation or warranty is made as to the accuracy, completeness or reliability of any estimates, opinions, conclusions or other information contained in this document. This document may contain certain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of ClearView. You should not place reliance on forward-looking statements. To the maximum extent permitted by law, ClearView and its related entities and each of their respective directors, officers and agents disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered as a result of relying on anything in this document including any forward-looking statements. Past performance is not an indication of future performance. Page 4 of 4