report Products issued by AMP Superannuation Limited January 17 SignatureSuper SignatureSuper Select SignatureSuper Allocated Pension CustomSuper SuperLeader Flexible Lifetime Super AMP Flexible Super Contents Standard Measure 1 Investment strategies Appendix Investment matrix 9 Notes Notes about asset allocations This section illustrates the composition of the asset sectors in which the various investment s are invested. These asset allocations will vary from time to time and the risk (and therefore volatility) of the portfolio will vary accordingly. Asset sectors may be added to, separated or combined. The asset allocation of the investment s takes into account the effect of derivatives. The manager uses derivatives to manage risk. Derivatives include a wide variety of financial contracts such as futures, s or swaps. These generally allow the manager to make asset allocations faster and less expensively than physically purchasing the securities involved. Standard Measure About the Standard Measure The Standard Measure (SRM) is a common risk descriptor used by superannuation funds. It is based on guidance from the Australian Prudential and Regulation Authority (APRA) to allow investors to compare investment s that are expected to deliver a similar number of negative annual returns over any -year period. AMP has introduced the SRM in accordance with the recommendations from the Financial Services Council (FSC) and Association of Superannuation Funds of Australia (ASFA). SRM descriptors Each investment described in the superannuation trustee s Product Disclosure Statement (PDS) includes an SRM. The table below sets out the SRM s and s used for each investment based on the estimated number of negative annual returns that an investment may experience over any -year period. Negative annual returns may not occur in consecutive years. 1/ Very low Less than. / Low. to less than 1 / Low to medium 1 to less than 4/ Medium to less than / Medium to high to less than 4 / High 4 to less than 7/ Very high or greater Estimated number of negative annual returns over any -year period For example, investment s with a risk / of / Medium to High may experience between to less than 4 years of negative annual returns over any -year period. SignatureSuper, CustomSuper, SuperLeader, and Flexible Lifetime are registered trademarks of AMP Life Limited ABN 84 79 79. AMP Flexible Super is a registered trademark of AMP Limited ABN 49 79 4 19. 1
Limitations The SRM is not a complete assessment of all forms of investment risk. For instance it does not detail what the size of a negative return could be or the potential for a positive return to be less than an investor may require to meet their objectives. Further, it does not take into account the impact of administration fees and tax on the likelihood of a negative return. The SRM is not a comprehensive account of the risks of investing and investors should consider these risk s in conjunction with the different risks of investing that apply to their investments. Investors should still ensure they are comfortable with the risks and potential losses associated with their chosen investment (s). Changes to the SRM For each investment, any significant changes to market conditions may alter the SRM from time to time. In addition, any changes to the methodology used (including any regulatory changes) may also alter the SRM results. We will generally review the SRM each year. Differences between each provider s SRM Investors should be aware that the SRM s used for each investment is based on the superannuation trustee s assessment and may differ to similar investment s offered by other providers. The differences are generally due to the methodology used in calculating the SRM. Investment strategies Investment AHL Alpha AMP All AMP Australian To generate medium to long term returns in both rising and falling markets by investing in another underlying investment which uses a proprietary managed futures program to invest in global securities. Investments will typically be hedged back to Australian dollars. s, s, forward contracts, swaps and other financial derivatives both on and off market exchanges are used. Markets traded may be accessed directly or indirectly and generally includes stocks, bonds, currencies, short-term interest rates, energies, metals, credit, and agriculturals. To provide high returns over the long term through a portfolio investing mostly in Australian and international shares. To provide a total return (income and capital growth) after costs and before tax, above the S&P/ASX Accumulation Index on a rolling 1 month basis. The portfolio uses a number of diverse styles including Enhanced Index, Core, Quant, Value and Sustainable Alpha styles to invest. The Enhanced Index approach takes on slightly higher levels of risk, relative to benchmark, than an indexed investment. The Core style is based on the belief that a key driver of share value is a company s ability to grow earnings. The Quant style uses a number of quantitative techniques to target pricing anomalies across a large number of shares using a highly disciplined investment process. The Value approach aims to identify companies that are currently undervalued in the belief that they will offer better returns. The Sustainable Alpha approach addresses environmental, social and governance issues as part of the financial assessment of companies. Managed futures 1 1 Australian s Listed property and Direct property and 4 4 1.. 1 8 1 1 1 1 17 9 1 1
AMP Balanced and Portfolio Plan (ordinary only) AMP Capital Asian Equity AMP Plus To provide moderate to high returns over the medium to long term through a portfolio diversified across the main asset classes, but with an emphasis on shares and property. To provide total returns (capital growth and income) above the MSCI All Country Asia ex-japan Net Index (AUD) over the long term, through investment in a portfolio of Asian equities (diversified by sector and geography). The portfolio targets listed investment opportunities across the Asia (ex-japan) region in developed and emerging markets including those in Greater China, the Indian Sub continent, and East and South-East Asian regions such as Hong Kong, Korea, Singapore, Taiwan and Indonesia. The portfolio gains exposure to companies operating in China primarily through Hong Kong listed securities. For companies in India, the portfolio primarily accesses Indian exchanges directly. The portfolio generally invests in companies with a market capitalisation over US$1 billion and may also invest in cash and other securities. In normal circumstances, the portfolio is not hedged to the Australian dollar; however hedging may be implemented where required to enhance returns or manage risk. Derivatives such as s, futures, swaps or credit derivatives may be used. To provide a return above the Bloomberg AusBond Bank Bill Index on a rolling 1-month basis, subject to the provision of the guarantee as described below. The portfolio invests in a diversified range of investment grade Australian money market securities, including cash-like securities with short-term maturities such as prime bank bills, commercial paper and term deposits. The portfolio may also invest in medium-term securities including floating rate notes and asset-backed securities. The portfolio may use derivatives such as s, futures or forward rate agreements to protect against risks, enhance returns or increase or reduce exposure to physical investments where this is consistent with the investment objectives. Guarantee: AMP Life guarantees that the unit price will never fall. This may mean that at times the unit price will not immediately rise with upward movements in asset values. Australian s Listed property and Direct property and 7. 8. 1 8 1 4 17 7 8 1 17 1 9 1 1 1 1 Very Low
AMP Conservative AMP High AMP International Bond AMP International AMP Moderate To provide returns greater than those from cash over the short to medium term through a diversified portfolio, with a core of cash and fixed interest and some exposure to shares and property. To provide high returns over the medium to long term through a diversified portfolio investing mostly in shares with some property, fixed interest and alternative assets. To provide total returns (income and capital growth) after costs and before tax, above the performance benchmark on a rolling -year basis. The portfolio provides investors with access to a diversified portfolio of short and long-term global fixed income securities. These securities may include government, government related, corporate, asset-backed and hybrid securities in both developed and emerging markets. Generally, international investments are hedged back to Australian dollars. To provide total returns (income and growth) after costs and before tax, above the performance benchmark on a rolling -year basis. The benchmark is the MSCI World (ex Australia) Accumulation Index. The portfolio provides investors with access to international shares, and exposure to a range of international share managers. In normal circumstances the portfolio is unhedged to Australian dollars. Currency exposures are individually managed by the underlying investment managers. To provide returns greater than those from cash or fixed interest over the medium to long term through a diversified portfolio of cash, fixed interest, shares and property. Australian s Listed property and Direct Property and Australian s Listed property and Direct Property and securities and cash Australian property Global property Global Australian fixed interest 1 1 1 7 4.. 1 1 9 44 11 7 47 49 1 47 8 1 1 1 1 1 Low to Medium 1 1 4 Medium 1 19 1.. 11 1 9 1 1 9 1 1 1 1 4 Medium to High 4
AMP Moderate (superannuation only) To provide returns greater than those from cash or fixed interest over the medium to long term through a diversified portfolio of cash, fixed interest, shares and property. Australian s Listed property and Direct Property and 19 1.. 17 11 1 9 9 1 17 4 1 1 Medium to High AMP Secure To provide returns (after fees and before tax) which exceed inflation over the longer term, but with lower returns and less variability of returns than would be expected from an investment with the same exposure to bonds, cash, shares and property. The investment strategy is to invest in a diversified portfolio with a core of cash and bonds and limited exposure to shares and property. Changes to investments can be made according to the outlook for the various investment sectors and the nature of the plan. This is a crediting rate investment. Assurance: Investors are protected from capital losses at specified times. s and alternative investments Property & Fixed interest & cash 1 4 1 7 1 Very Low BlackRock Australian Equity Absolute Return To deliver returns that is 8% per annum above the RBA Rate Target, before fees over rolling year periods. The Fund targets a zero net market exposure and aims to deliver absolute returns irrespective of the returns of the broader market. It invests in an underlying strategy called the BlackRock Australian Equity Market Neutral Fund which provides an exposure to long and short Australian equity positions and is based on BlackRock s quantitative process that uses a range of signals to look for mispriced stocks. This underlying investment may borrow securities from a counterparty that is a securities lender. 1 1 1 4 Medium BT Australian To provide a return (before fees, costs and taxes) that exceeds the S&P/ASX Accumulation Index over the medium to long term. It is an actively managed portfolio of that has the potential for long-term capital growth and tax effective income and offers diversification across a broad range of Australian companies and industries. This investment fund may also hold cash and may use derivatives for managing market exposure. The investment manager s process for is based on a core investment style and aims to add value through active stock selection and fundamental company research which focuses on four key factors: valuation, financial risk, franchise and management quality. 1 8 1
Asian To provide high returns over the long term, whilst accepting a higher level of volatility, through a diversified portfolio of international shares within the Asia ex-japan universe. The objective is to provide a total return, after costs and before tax, above the return from the MSCI All Country Asia ex Japan Net Index on a rolling to year basis. 1 9 1 1 Australian Bond To provide a total return (income and capital growth) after costs and before tax, above the UBS Composite Bond (All Maturities) Index on a rolling -year basis. The portfolio invests in short and long-term fixed interest securities including government, bank, corporate and asset backed securities, derivatives and currency. The portfolio may also have exposure to international securities in both developed and emerging markets. In normal circumstances the portfolio s international investments are fully hedged back to Australian dollars. Australian Bonds 1 9 1 1 Low to Medium Balanced To provide moderate to high returns over the long term through a diversified portfolio, with a bias towards growth assets such as shares, property and alternative assets. The portfolio aims to achieve a rate of return above inflation after costs over a -year period. Australian s Australian/Global property 7 1.. 1 1 1 4 1 4 Medium to High Conservative To provide moderate returns over the medium term through a diversified portfolio, with a bias towards defensive assets such as cash and fixed interest. The portfolio aims to achieve a rate of return above inflation after costs over a three-year period. Australian s Australian/ Global property Global 1 9.. 1 4 Low to Medium Emerging Markets To provide high returns over the long term, whilst accepting a higher level of volatility, through a diversified portfolio of international shares, focussing on emerging markets. The objective is to provide a total return, after costs and before tax, higher than the return from the MSCI Emerging Markets Index on a rolling to year basis. 1 9 1 1 Extended Markets International To provide a total return (income and capital growth), after costs and before tax, higher than the return from the weighted return of the MSCI World ex-australia Small Cap Index and the MSCI Emerging Markets Index on a rolling year basis. The portfolio invests in international shares, focussing on small companies and emerging markets. In certain market conditions, the portfolio may hold a higher level of cash. 1 9 1 1 7 Very High
To provide high returns over the long term through a diversified portfolio investing mostly in shares with some exposure to property, fixed interest and alternative assets. The portfolio aims to achieve a rate of return above inflation after costs over a to 7-year period. Property 1 4 1 1 Australian fixed interest High To provide high returns over the long term through a diversified portfolio investing mostly in Australian and international shares with some exposure to alternative assets and property. Property 7 41 1 4 4 4 The portfolio aims to achieve a rate of return above inflation after costs over a 7-year or longer period. Australian fixed interest 1 1 1 1 International Bond To provide a total return, after costs and before tax, higher than the return from the Barclays Capital Global Aggregate Index (hedged back to Australian dollars) on a rolling year basis through investing in fixed or floating interest rate securities in countries around the globe. These securities may include government securities, government related securities, corporate securities, asset backed securities and hybrid securities (such as convertible notes) in both developed and emerging markets. and cash 1 1 Low Moderately Conservative To provide moderate returns over the medium term through a diversified portfolio of assets such as fixed interest, shares, property and alternative assets. The portfolio aims to achieve a rate of return above inflation after costs over a to -year period. Property 18 9 1 1 1 4 Medium Australian fixed interest 17 1 4 1 Lazard Global Small Cap To achieve total returns (includes income and capital appreciation and before the deduction of fees and taxes) that exceed those of the MSCI World Small Cap Accumulation Index by % per annum over rolling year periods. The investment strategy is to provide investors with access to investments in global small companies in any geographical location. The portfolio will generally have: Small cap equities 1 9 1 Limits on the equity securities (including securities convertible into equity securities) holdings of any one issuer at the time of purchase; No more than % of the assets may be invested in the equity securities (including securities convertible into equity securities) of issuers located in emerging market countries. Emerging market countries will be determined by the investment manager but are generally considered to be countries not included in the MSCI World Small Cap Accumulation Index. 7
Macquarie Balanced To outperform the Macquarie Balanced Structured Benchmark over the medium term (before fees) by providing investors with broad asset class exposure through focusing on growth assets with some exposure to cash and fixed interest. The portfolio aims to return a balanced level of growth and income. Direct property Listed property Australian fixed interest. 1. 1 1 18.7. 1 1 4 4 Medium UBS Australian Small Companies To provide investors with a total return (after costs) in excess of the S&P/ASX Small Ordinaries Accumulation Index when measured over rolling five-year periods. This investment fund is best suited to investors who seek a well diversified portfolio of small capitalisation securities. Due to the inherent volatility of share markets, and in particular smaller capitalisation companies, investment returns will fluctuate and may even be negative in some periods. The investment fund is an actively managed portfolio of securities listed on recognised exchanges in Australia and New Zealand, or those the manager reasonably expects to list within six months. The investment fund may invest in financial derivatives to gain exposure to the Australian share market or to manage investment risk. Normally the investment fund will hold between and 9 stocks with the majority of securities outside the S&P/ASX 1 Index, with the flexibility to also invest up to % of the portfolio into the S&P MidCap Index. 1 9 1 1 7 Very High 8
Appendix Investment matrix Investment AMP Flexible Super Flexible Lifetime Super SignatureSuper SignatureSuper Select SignatureSuper Allocated Pension CustomSuper SuperLeader AMP All AMP Australian AMP Balanced AMP Capital Asian Equity AMP Conservative AMP High AMP Moderate AMP Australian Property AMP Plus AMP International Bond AMP International AMP Secure AMP Secure AHL Alpha BlackRock Australian Equity Absolute Return BT Australian Colonial First State Australian Asian Australian Bond Balanced Conservative Emerging Markets Extended Markets Intl. High International Bond Moderately Conservative Lazard Global Small Cap Macquarie Balanced UBS Australian Small Companies 9
Contact us phone 11 7 fax 1 1 7 web amp.com.au mail Customer Service AMP Life Limited PO Box PARRAMATTA NSW 14 What you need to know This report has been prepared for the purpose of providing general information on your investment s. Any element of advice contained in this report is of a general nature only and is not based on your personal objectives, financial situation or needs. Accordingly, you should consider the appropriateness of the information to your objectives, financial situation or needs before acting on the information contained in this report. We recommend that you seek financial advice before acting on the information. Simply call your financial adviser or AMP on 1 888 to arrange an appointment. Any element of general advice is provided by AMP Life Limited ABN 84 79 79, AFSL No. 71, the issuer for the non-superannuation products and the administrator for superannuation products. AMP Life Limited is part of the AMP group of companies. AMP companies receive fees and charges in relation to AMP products as set out in the relevant customer information brochure. AMP employees and directors receive salaries, bonuses and other benefits from the AMP group. This report is solely for the use of the person to whom it is provided. 11 1/1