31 DECEMBER 2017 QUARTERLY REPORT FOR EMPLOYERS AND ADVISERS AMP MySuper A lifecycle investment solution All fund returns are quoted post fees and taxes AMP MYSUPER 1
Contents Message from your fund manager 3 AMP MySuper 1990s 4 AMP MySuper 1980s 6 AMP MySuper 1970s 8 AMP MySuper 1960s 10 AMP MySuper 1950s 12 AMP MySuper Capital Stable 14 AMP MySuper s Portfolio Management Team 16 Currency management 19 MESSAGE FROM YOUR FUND MANAGER AMP MySuper December 2017 2 AMP MYSUPER
It is always pleasing to be able to report to members that their retirement savings are growing strongly and we are happy to be able to say this as we close the books for 2017. In a nutshell, 2017 was a good year. Whilst our portfolios were positioned for equities to outperform, we were not anticipating high double-digit gains. Yet some regions delivered just that. In local currency terms, the US was up 21%, emerging markets up 30%, Japan up 22%, Europe and Australia up 12%. Even after allowing for a stronger Australian dollar domestic investors fared well holding international assets. Equity markets were fuelled by many factors; improved, synchronised global growth, better corporate earnings across a broader range of sectors, low inflation, little evidence of any emerging inflationary pressure and central bank comments which enforced that policy changes will remain gradual. The recently approved tax package in the US also boosted sentiment into year end. Overall, 2017 was an economic sweet spot which was incredibly supportive for asset classes including equities, property, infrastructure and private equity. This has been a long expansion period (starting in 2009) and as per past cycles each additional year of positive performance brings us closer to a turning point. Predicting the maturity of a cycle is fraught with difficulty. There are some tell-tale signs that could suggest we are close to the top; rife speculation in crypto currencies such as Bitcoin (up close to 2000%), the very low level of both realised and expected volatility and strong business, consumer and investor sentiment which can often suggest complacency. However, many equity markets such as Europe, Japan and Australia are still far from bubble levels and even though the US has run hard, it hasn t pushed into excessive levels just yet. You could say that that we remain in a not too hot, not too cold environment which should continue to support equity markets through 2018. That said, the uncertainty we are faced with is; how far can interest rates rise without becoming negative for equity markets? The US has raised rates 5 times but globally conditions remain accommodative. A key focus for 2018 will be how central banks proceed to wind back their accommodative policy and whether inflation shows signs of life on the back of stronger wages growth given very low unemployment in the US and stronger commodity prices. For some time now we have held a higher exposure to international equities, favouring parts of Europe, the emerging markets and sectors such as US financials. Choosing sectors and regions will become increasingly important over 2018 as we expect trading conditions will become more volatile. We continue to hold an underweight to Australian shares. While the Australian economy should do OK in 2018, Australian industrial companies are challenged by weak consumer and credit growth. Resource companies may do better but supply, demand dynamics suggest that gains will be capped. We maintain a lower exposure to bonds because we think these assets are more vulnerable to weakness if there is any sign of emerging inflation and current yields are not compensating us for risk. We also hold a lower exposure to other interest rate sensitive assets such as property. This begs the question: how are we managing the risk of higher inflation in our more conservative options that have a much higher allocation to interest rate sensitive assets? There has been much debate about the defensiveness and diversifying nature of bonds in the current environment where yields are already very low and expected to rise (which causes bond prices to fall). We remain very focussed on this dynamic for our older cohorts and how we position these portfolios in this unique environment. Whilst we have typically held a lower weight to bonds in favour of cash, we are also acutely cognisant of increasing diversification by investing in alternative strategies which move less to the rhythm of bond and equity markets. We are focussed on inflation protected strategies, more targeted bond market opportunities and whilst growth assets have a very important role to play in these conservative portfolios, we are mindful of increased volatility and have been holding equity protection strategies to mute the impact of any significant correction. All in all, we finish 2017 and start 2018 on an optimistic note. For our MySuper members, annual returns have been positive since launch in 2014. This performance keeps us on track to meet our overarching objective of delivering members a comfortable retirement outcome. We thank you for your support of the MySuper lifecycle options, and look forward to another successful year ahead. Debbie Alliston, CFA Chief Investment Officer Corporate Super AMP Capital AMP MYSUPER 3
AMP MYSUPER 1990S THE 1990S INVESTOR AMP MySuper 1990s is for younger Australians, most of whom will have just entered the workforce. As these members are at the beginning of their working life, their investment horizon is very long-term. Their focus is on aggressively growing their superannuation portfolio. The best way for them to do this is by investing in asset classes that are expected to generate the highest returns. This is why AMP MySuper 1990s invests primarily in shares, also with exposure to property and alternative assets such as private equity and infrastructure. Of course, higher returns also means greater risk, but this makes sense for younger members. Because retirement is decades away for these members, they have more time to weather the ups and downs of the market and recover from any market losses while still building wealth over the long term. 4 AMP MYSUPER
FUND OBJECTIVE AMP MySuper 1990s aims to achieve an average rate of return above the Consumer Price Index of 4.5 per cent per annum, after fees and superannuation tax, over a 10 year period. INVESTOR PROFILE International equities 35.5 Australian equities 28.5 Emerging markets equities 6.0 Absolute return growth 6.0 Direct property 4.5 Diversified credit 4.0 Private equity 4.0 Australian bonds 4.0 Direct infrastructure 3.0 Listed property 2.5 Cash 1.5 Listed infrastructure 0.5 0% CURRENT INVESTMENT MIX % as at 31 December 2017 10% > Standard risk measure: 6/High > Suggested minimum investment timeframe: 10 years 40% PERFORMANCE AMP MySuper 1990s returned 4.6% for the December quarter. 20% 30% AMP MySuper 1990s CPI+ target December 2017 Quarter Highlights 4.6% 1.7% 11.1% 6.5% 8.4% 8.6% 6.3% 6.3% 3mths 1yr 3yrs Since Inception Inception date is 2 January 2014. Performance is after fees and superannuation tax. The AMP MySuper 1990s Fund returned a strong 4.6% in the December quarter. Encouraging economic releases and robust corporate earnings results boosted investor sentiment globally, which reflected favourably on risk-based assets. Along with a strong quarterly result, the Fund s performance for 2017 was extremely good. The acceleration in synchronised global growth in markets over the year provided the foundation for strong performance across most asset classes. The long held underweight exposure to Australian equites in favour of international equites (primarily through European equities) was positive for Fund returns, with global markets outperforming the domestic market. Supportive currency movements, improved corporate earnings and lower than anticipated geopolitical risks were the key drivers of growth in developed international markets. By contrast, lacklustre corporate earnings, regulatory pressures, and a lack of wage growth weighed on the performance of Australian equities. However, the market was still able to deliver double digit returns on the back of stronger commodity prices and global growth. Emerging market equities were also a key driver of Fund performance on the back of these factors. The Fund s other growth investments such as property, infrastructure and alternatives (private equity, hedge funds) were all also solid contributors to Fund returns over the year. For the start of 2018, we remain relatively comfortable in maintaining a bias towards international equities through Europe. With a maturing business cycle in the US, increasing global equity valuations and gradual tightening of global monetary policy, markets could see some volatility through 2018. We have utilised option protection to mitigate any downside in Fund performances caused by a correction in equity markets. 100% DEFENSIVE 94.5% Growth 5.5% Defensive % of growth Assets GROWTH 15 20 25 30 35 40 45 50 55 60 65 70 Age (years) AMP MYSUPER 5
AMP MYSUPER 1980S THE 1980S INVESTOR Members in AMP MySuper 1980s are aged in their late twenties/early thirties. As such, they still have the majority of their working life ahead of them. Their priority is rapid accumulation of assets in order to build a base from which superannuation wealth can grow. This priority means investing in higher return asset classes. Higher returns mean more rapid growth in portfolio value. AMP MySuper 1980s invests primarily in shares, also with exposure to property and alternative assets such as private equity and infrastructure. This is a higher risk strategy, but is appropriate for members born in the 1980s. As it is a long time before they will retire, these members have more time to recover from any market declines and can afford to take on a high degree of risk while working towards their accumulation objective. 6 AMP MYSUPER
FUND OBJECTIVE AMP MySuper 1980s aims to achieve an average rate of return above the Consumer Price Index of 4.5 per cent per annum, after fees and superannuation tax, over a 10 year period. INVESTOR PROFILE International equities 35.0 Australian equities 29.0 Emerging markets equities 6.0 Absolute return growth 6.0 Direct property 4.5 High yield credit 4.0 Private equity 4.0 Australian bonds 4.0 Direct infrastructure 3.0 Listed property 2.5 Cash 1.5 Listed infrastructure 0.5 0% CURRENT INVESTMENT MIX % as at 31 December 2017 10% > Standard risk measure: 6/High > Suggested minimum investment timeframe: 10 years 40% PERFORMANCE AMP MySuper 1980s returned 4.8% for the December quarter. 20% 30% 4.8% AMP MySuper 1980s CPI+ target 1.7% 11.4% 6.5% 8.5% 8.7% 6.3% 6.3% 3mths 1yr 3yrs Since Inception Inception date is 2 January 2014. Performance is after fees and superannuation tax. December 2017 Quarter Highlights The AMP MySuper 1980s Fund returned a strong 4.8% in the December quarter. Encouraging economic releases and robust corporate earnings results boosted investor sentiment globally, which reflected favourably on risk-based assets. Along with a strong quarterly result, the Fund s performance for 2017 was extremely good. The acceleration in synchronised global growth in markets over the year provided the foundation for strong performance across most asset classes. The long held underweight exposure to Australian equites in favour of international equites (primarily through European equities) was positive for Fund returns, with global markets outperforming the domestic market. Supportive currency movements, improved corporate earnings and lower than anticipated geopolitical risks were the key drivers of growth in developed international markets. By contrast, lacklustre corporate earnings, regulatory pressures, and a lack of wage growth weighed on the performance of Australian equities. However, the market was still able to deliver double digit returns on the back of stronger commodity prices and global growth. Emerging market equities were also a key driver of Fund performance on the back of these factors. The Fund s other growth investments such as property, infrastructure and alternatives (private equity, hedge funds) were all also solid contributors to Fund returns over the year. For the start of 2018, we remain relatively comfortable in maintaining a bias towards international equities through Europe. With a maturing business cycle in the US, increasing global equity valuations and gradual tightening of global monetary policy, markets could see some volatility through 2018. We have utilised option protection to mitigate any downside in Fund performances caused by a correction in equity markets. 100% DEFENSIVE 94.5% Growth 5.5% Defensive % of growth Assets GROWTH 15 20 25 30 35 40 45 50 55 60 65 70 Age (years) AMP MYSUPER 7
AMP MYSUPER 1970S THE 1970S INVESTOR Though firmly established in their careers with a decade or two of work experience, members of AMP MySuper 1970s still have a substantial portion of their working life ahead of them. Retirement remains in the distant future, so the primary goal remains growth and expansion of their growing superannuation portfolio. This goal translates to a mix of assets still taking on risk to grow the portfolio, with shares comprising the largest holding. Alongside shares are meaningful weights to property and alternative assets such as private equity and infrastructure which, though growth in nature, play a diversifying role against the share market. The investment time horizon for AMP MySuper 1970s members can still be considered long-term, so a higher risk strategy is still appropriate. Time is on the side of these members, they have time to bounce back from any declines in portfolio value due to market fall. 8 AMP MYSUPER
FUND OBJECTIVE AMP MySuper 1970s aims to achieve an average rate of return above the Consumer Price Index of 4.5 per cent per annum, after fees and superannuation tax, over a 10 year period. INVESTOR PROFILE International equities 33.5 Australian equities 27.5 Emerging markets equities 6.0 Absolute return growth 6.0 Direct property 4.5 Diversified credit 4.0 Private equity 4.0 Australian bonds 4.0 Direct infrastructure 3.0 Listed property 2.5 Cash 1.5 Listed infrastructure 0.5 0% CURRENT INVESTMENT MIX % as at 31 December 2017 10% > Standard risk measure: 6/High > Suggested minimum investment timeframe: 10 years 40% PERFORMANCE AMP MySuper 1970s returned 4.6% for the December quarter. 20% 30% AMP MySuper 1970s CPI+ target December 2017 Quarter Highlights 4.6% 1.7% 11.0% 6.5% 8.3% 8.5% 6.3% 6.3% 3mths 1yr 3yrs Since Inception Inception date is 2 January 2014. Performance is after fees and superannuation tax. The AMP MySuper 1970s Fund returned a strong 4.6% in the December quarter. Encouraging economic releases and robust corporate earnings results boosted investor sentiment globally, which reflected favourably on risk-based assets. Along with a strong quarterly result, the Fund s performance for 2017 was extremely good. The acceleration in synchronised global growth in markets over the year provided the foundation for strong performance across most asset classes. The long held underweight exposure to Australian equites in favour of international equites (primarily through European equities) was positive for Fund returns, with global markets outperforming the domestic market. Supportive currency movements, improved corporate earnings and lower than anticipated geopolitical risks were the key drivers of growth in developed international markets. By contrast, lacklustre corporate earnings, regulatory pressures, and a lack of wage growth weighed on the performance of Australian equities. However, the market was still able to deliver double digit returns on the back of stronger commodity prices and global growth. Emerging market equities were also a key driver of Fund performance on the back of these factors. The Fund s other growth investments such as property, infrastructure and alternatives (private equity, hedge funds) were all also solid contributors to Fund returns over the year, overshadowing the relatively modest gains from fixed interest. For the start of 2018, we remain relatively comfortable in maintaining a bias towards international equities through Europe. With a maturing business cycle in the US, increasing global equity valuations and gradual tightening of global monetary policy, markets could see some volatility through 2018. We have utilised option protection to mitigate any downside in Fund performances caused by a correction in equity markets. Our overall bond position remains underweight in favour of cash as we expect bonds to remain vulnerable to any evidence of inflationary pressure or monetary tightening. 100% DEFENSIVE 92% Growth 8% Defensive % of growth Assets GROWTH 15 20 25 30 35 40 45 50 55 60 65 70 Age (years) AMP MYSUPER 9
AMP MYSUPER 1960S THE 1960S INVESTOR AMP MySuper 1960s investor could be considered to be at somewhat of a superannuation crossroad. They have worked hard to build a sound superannuation asset base in order to fund their retirement goals. That retirement is still a way off, but looming ever-larger. The asset mix of AMP MySuper 1960s reflects this point in their life. On one hand, asset accumulation remains a clear priority; the option must seek out higher returns in order to continue to grow the superannuation base. Accordingly, growth assets such as shares comprise more than half of the portfolio. On the other hand, the need to protect the existing capital base has become increasingly greater as members edge towards retirement. This requires a decent position in more defensive assets that will provide more downside protection. With its meaningful exposures to bonds and cash, the 1960s option provides for this. 10 AMP MYSUPER
FUND OBJECTIVE AMP MySuper 1960s aims to achieve an average rate of return above the Consumer Price Index of 3.0 per cent per annum, after fees and superannuation tax, over a 10 year period. INVESTOR PROFILE > Standard risk measure: 5/Medium to High International equities 27.5 Australian equities 18.0 Australian bonds 11.0 Cash 8.5 Absolute return defensive 5.0 Emerging markets equities 4.0 Diversified credit 4.0 Absolute return growth 4.0 Direct property 3.5 Direct infrastructure 3.0 Private equity 2.5 Listed property 2.0 Listed infrastructure 1.0 International bonds 1.0 0% CURRENT INVESTMENT MIX % as at 31 December 2017 10% > Suggested minimum investment timeframe: 10 years 40% PERFORMANCE AMP MySuper 1960s returned 3.5% for the December quarter. 20% 30% 3.5% AMP MySuper 1960s CPI+ target 1.4% 8.1% 5.0% 6.3% 4.7% 6.6% 4.7% 3mths 1yr 3yrs Since Inception Inception date is 2 January 2014. Performance is after fees and superannuation tax. December 2017 Quarter Highlights The AMP MySuper 1960s Fund returned a strong 3.5% in the December quarter. Encouraging economic releases and robust corporate earnings results boosted investor sentiment globally, which reflected favourably on risk-based assets. Along with a strong quarterly result, the Fund s performance for 2017 was extremely good. The acceleration in synchronised global growth in markets over the year provided the foundation for strong performance across most asset classes. The long held underweight exposure to Australian equites in favour of international equites (primarily through European equities) was positive for Fund returns, with global markets outperforming the domestic market. Supportive currency movements, improved corporate earnings and lower than anticipated geopolitical risks were the key drivers of growth in developed international markets. By contrast, lacklustre corporate earnings, regulatory pressures, and a lack of wage growth weighed on the performance of Australian equities. However, the market was still able to deliver double digit returns on the back of stronger commodity prices and global growth. Emerging market equities were also a key driver of Fund performance on the back of these factors. The Fund s other growth investments such as property, infrastructure and alternatives (private equity, hedge funds) were all also solid contributors to Fund returns over the year, overshadowing the relatively modest gains from fixed interest. For the start of 2018, we remain relatively comfortable in maintaining a bias towards international equities through Europe. With a maturing business cycle in the US, increasing global equity valuations and gradual tightening of global monetary policy, markets could see some volatility through 2018. We have utilised option protection to mitigate any downside in Fund performances caused by a correction in equity markets. Our overall bond position remains underweight in favour of cash as we expect bonds to remain vulnerable to any evidence of inflationary pressure or monetary tightening. 100% DEFENSIVE 69.5% Growth 30.5% Defensive % of growth Assets GROWTH 15 20 25 30 35 40 45 50 55 60 65 70 Age (years) AMP MYSUPER 11
AMP MYSUPER 1950S THE 1950S INVESTOR Members in AMP MySuper 1950s are approaching the end of their working life and, as such, are beginning to focus more intently on preparing for retirement. After many years in the workforce, these members have built up a solid superannuation base, but as they are near to retirement, their investment horizon is relatively short. Therefore, we are conservative in terms of the degree of investment risk taken in AMP MySuper 1950s. Some exposure to shares and other risky assets is necessary to continue to grow the portfolio to fund retirement, however, the asset mix of the 1950s option reflects a moderately risk-averse strategy overall, designed first and foremost to protect the capital members have built. Around half of the option is invested bonds, cash and other defensive assets. This limits the potential impact of share market falls and other market shocks on members retirement savings. 12 AMP MYSUPER
FUND OBJECTIVE AMP MySuper 1950s aims to achieve an average rate of return above the Consumer Price Index of 2.0 per cent per annum, after fees and superannuation tax, over the relevant time period. INVESTOR PROFILE > Standard risk measure: 4/Medium International equities 20.5 Cash 17.0 Australian bonds 16.0 Australian equities 15.0 International bonds 9.0 Absolute return defensive 6.0 Absolute return growth 4.0 Diversified credit 3.5 Emerging markets equities 2.5 Listed property 2.0 Listed infrastructure 2.0 Direct property 1.5 Direct infrastructure 1.0 0% CURRENT INVESTMENT MIX % as at 31 December 2017 10% > Suggested minimum investment timeframe: Under 5 years 40% PERFORMANCE AMP MySuper 1950s returned 2.8% for the December quarter. 20% 30% AMP MySuper 1950s CPI+ target December 2017 Quarter Highlights 2.8% 1.1% 6.5% 5.4% 4.8% 4.2% 4.0% 3.7% 3mths 1yr 3yrs Since Inception Inception date is 2 January 2014. Performance is after fees and superannuation tax. The AMP MySuper 1950s Fund returned a positive 2.8% in the December quarter. Encouraging economic releases and robust corporate earnings results boosted investor sentiment globally, which reflected favourably on risk-based assets. Along with a strong quarterly result, the Fund s performance for 2017 was extremely good. The acceleration in synchronised global growth in markets over the year provided the foundation for strong performance across most asset classes. The Fund s allocation towards defensive assets, particularly fixed interest, had little impact on overall performance. With central banks beginning to tighten monetary policy and investors shifting to a risk on environment, yield-driven assets underperformed the Fund s equity allocation. The long held underweight exposure to Australian equites in favour of international equites (primarily through European equities) was positive for Fund returns, with global markets outperforming the domestic market. Supportive currency movements, improved corporate earnings and lower than anticipated geopolitical risks were the key drivers of growth in developed international markets. By contrast, lacklustre corporate earnings, regulatory pressures, and a lack of wage growth weighed on the performance of Australian equities. However, the market was still able to deliver double digit returns on the back of stronger commodity prices and global growth. Emerging market equities were also a key driver of Fund performance on the back of these factors For the start of 2018, we remain relatively comfortable in maintaining a bias towards international equities through Europe. With a maturing business cycle in the US, increasing global equity valuations and gradual tightening of global monetary policy, markets could see some volatility through 2018. We have utilised option protection to mitigate any downside in Fund performances caused by a correction in equity markets. Our overall bond position remains underweight in favour of cash as we expect bonds to remain vulnerable to any evidence of inflationary pressure or monetary tightening. 100% DEFENSIVE 52% Growth 48% Defensive % of growth Assets GROWTH 15 20 25 30 35 40 45 50 55 60 65 70 Age (years) AMP MYSUPER 13
THE CAPITAL STABLE INVESTOR AMP MySuper Capital Stable is designed for members aged in their sixties and beyond and already in retirement. As these members are no longer earning a full working salary, they are no longer contributing to their superannuation account. The focus is on protecting the balance they have built. This is particularly important as members will be looking to this superannuation balance to generate the income stream required to fund their ongoing expenses and lifestyle. Capital preservation is the priority. Reflecting this priority, AMP MySuper Capital Stable comprises a mix of predominantly lower risk assets such as bonds and cash. Where there is investment in more growth-oriented assets, the preference is for more defensive, yieldfocused types like global listed property. This makes for a more stable return profile, and supports the income generation requirements of the Capital Stable option. AMP MYSUPER CAPITAL STABLE 14 AMP MYSUPER
FUND OBJECTIVE AMP MySuper Capital Stable aims to achieve an average rate of return above the Consumer Price Index of 15 per cent per annum, after fees and superannuation tax, over the relevant time period. Australian bonds 19.0 Cash 19.0 International equities 18.0 Australian equities 14.0 Absolute return defensive 6.0 International bonds 5.0 Absolute return growth 4.0 Diversified credit 3.5 Listed property 3.0 Listed infrastructure 3.0 Emerging markets equities 2.5 0% CURRENT INVESTMENT MIX % as at 31 December 2017 10% INVESTOR PROFILE > Standard risk measure: 3/Low to Medium > Suggested minimum investment timeframe: No minimum 40% PERFORMANCE AMP MySuper Capital Stable returned 2.5% for the December quarter. 20% 30% 2.5% AMP MySuper Capital Stable CPI+ target 1.1% 6.0% 3.9% 4.4% 3.7% 5.0% 3.7% 3mths 1yr 3yrs Since Inception Inception date is 2 January 2014. Performance is after fees and superannuation tax. December 2017 Quarter Highlights The AMP MySuper Capital Stable Fund returned 2.5% in the December quarter. Encouraging economic releases and robust corporate earnings results boosted investor sentiment globally, which reflected favourably on riskbased assets. Along with a strong quarterly result, the Fund s performance for 2017 was extremely good. The acceleration in synchronised global growth in markets over the year provided the foundation for strong performance across most asset classes. The Fund s sizeable allocation towards defensive assets, particularly fixed interest, had little impact on overall performance. With central banks beginning to tighten monetary policy and investors shifting to a risk-on environment, yield-driven assets underperformed the Fund s equity allocation. The long held underweight exposure to Australian equites in favour of international equites (primarily through European equities) was positive for Fund returns, with global markets outperforming the domestic market. Supportive currency movements, improved corporate earnings and lower than anticipated geopolitical risks were the key drivers of growth in developed international markets. By contrast, lacklustre corporate earnings, regulatory pressures, and a lack of wage growth weighed on the performance of Australian equities. However, the market was still able to deliver double digit returns on the back of stronger commodity prices and global growth. Emerging market equities were also a key driver of Fund performance on the back of these factors. For the start of 2018, we remain relatively comfortable in maintaining a bias towards international equities through Europe. With a maturing business cycle in the US, increasing global equity valuations and gradual tightening of global monetary policy, markets could see some volatility through 2018. We have utilised option protection to mitigate any downside in Fund performances caused by a correction in equity markets. Our overall bond position remains underweight in favour of cash as we expect bonds to remain vulnerable to any evidence of inflationary pressure or monetary tightening. 100% 48% Growth 52% Defensive % of growth Assets GROWTH DEFENSIVE 15 20 25 30 35 40 45 50 55 60 65 70 Age (years) AMP MYSUPER 15
WHO MANAGES AMP MYSUPER? The AMP MySuper Portfolio Management Team sits within AMP Capital s Multi-Asset Group. The Multi-Asset Group is one of Australia s most experienced multi-asset and diversified investment managers. AMP Capital s purpose is to help clients by seeking to provide outstanding investment outcomes. This means performance balanced by risk management, giving you confidence that AMP Capital is committed to helping clients meet their goal. AMP Capital is a leading investment house with over $178.9 billion 1 in funds under management. We have a heritage and strength in real estate and infrastructure, and specialist expertise in fixed income, equities and multi-asset solutions. Our experience and leadership across asset classes not only provides insights into ever-changing markets, but also means we are at the forefront of developing contemporary investment solutions for clients. We believe better outcomes start with a deep understanding of clients needs. Our culture of collaboration drives our people to share insights and to innovate. This way of working, combined with AMP Capital s expertise across asset classes, means clients benefit from deeper insights and stronger investment solutions. Our process is designed to deliver outstanding investment outcomes for clients. We are as focused on risk management as we are on opportunities. Investment decisions are based on rigorous and repeatable research and modelling, leveraging the depth of investment knowledge across AMP Capital. 1 As at 30 June 2017 16 AMP MYSUPER
The Portfolio Management team has overall responsibility for the investment performance of the full range of diversified portfolios, which covers both market-linked and goal based funds. The team set the strategic/neutral asset allocation and implement dynamic asset allocation decisions in conjunction with our Investment Strategy & Economics Team. The team also manage currency exposure, cash flow, liquidity, fee budgets and risk management of our diversified funds. MEET THE AMP MYSUPER PORTFOLIO MANAGEMENT TEAM Debbie Alliston is the Head of Multi-Asset Portfolio Management at AMP Capital and the Chief Investment Officer AMP Corporate Super. Debbie is responsible for overseeing the Group s specialised portfolio management capability. This capability includes the management of AMP Capital s full range of diversified portfolios including the AMP MySuper range, Future Directions diversified funds, AMP Diversified Options and Responsible Investment Leaders. Debbie s prior roles include Investment Director at Apostle Asset Management and roles at BT Investment Management including Head of Investments, Chief Operating Officer Investment Management and Director Head of Portfolio Management. Kristen Le Mesurier joined the multi asset group as a portfolio manager in July 2017 with responsibility for the RIL diversified funds. These funds are global multi-asset funds with an ethical overlay across every asset class. Kristen was actively engaged in these funds before becoming portfolio manager in her capacity as a senior ESG researcher at AMP Capital. In that role, she carried out ESG investment research for AMP Capital s equities and fixed income teams and ran engagement agendas on cultural practices in the banks, sugar and obesity, human rights and tax. Before joining AMP Capital, Kristen was an equities analyst covering Australian banks and insurers, and a corporate governance analyst advising institutional investors on governance risks across the ASX200. Matthew Hopkins is a senior member of the MySuper portfolio management team and the Senior Portfolio Manager for the AMP Capital Multi-Asset Fund. Matthew began his career with AMP Capital in 1989. He has held various positions at AMP including as a Portfolio Manager in global hedge funds and as Divisional Director of Investment Risk (Research and Strategy, Henderson Global Investors, London). AMP MYSUPER 17
CURRENCY MANAGEMENT Our currency positioning is actively managed, monitored and reported at the fund level. Each of the lifecycle funds has a neutral position to foreign currency exposure with ranges around this neutral position that permit the portfolio manager to take active positions based on our dynamic asset allocation model. The neutral exposure to foreign currency for each lifecycle option is shown on the next page. 18 AMP MYSUPER
Neutral exposure to foreign currency (% of total fund) AMP MySuper 1990s 25% AMP MySuper 1980s 25% AMP MySuper 1970s 24% AMP MySuper 1960s 18% AMP MySuper 1950s 13% AMP MySuper Capital Stable 12% AMP MYSUPER 19
Important note: AMP Capital Investors Limited (ABN 59001 777 591) (AFSL 232497) (AMP Capital) has been appointed as the investment manager for each of the AMP MySuper Funds, which can be accessed by investing in certain superannuation products issued by AMP Superannuation Limited (ABN 31 008 414 101) (AFSL 233060) (ASL) or NM Superannuation Pty Limited (ABN 31 008 428 322) (NM Super). Further information about the AMP MySuper Funds can be found in the product disclosure statement (PDS) for the relevant superannuation product issued by ASL or NM Super. The PDS contains important information about the relevant superannuation product and the AMP MySuper Funds and it is important investors read the PDS before making a decision about whether to acquire, continue to hold or dispose of the superannuation product (including decisions whether to invest in the AMP MySuper Funds through the superannuation product). Neither AMP Capital, ASL, NM Super, nor any other company in the AMP Group guarantees the repayment of capital or the performance of any financial product or any particular rate of return. Past performance is not a reliable indicator of future performance. While every care has been taken in the preparation of this presentation, AMP Capital makes no representation or warranty as to the accuracy or completeness of any statement in this presentation including without limitation any forecasts. This presentation has been prepared for the purpose of providing general information, without taking account of any particular investor s objectives, financial situation, or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this presentation, and seek professional advice, having regard to the investor s objectives, financial situation, and needs. This presentation is solely for the use of the party to whom it is provided. 20 AMP MYSUPER