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Long-Term Return Assumptions and Expectations Analysis

Understand expected returns based on equity, property, bond, and inflation risk premiums. Explore return projections with relevant data sources as of 31 May 2012 and SIM's portfolio construction position as of March 2011.

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Long-Term Return Assumptions and Expectations Analysis

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  1. Assumptions for Long-term returns: SA - Real Equity returns 7.0% Equity Risk premium 4.0% Property returns 6.0% Property premium 3.0% Bond returns 3.0% 0.5% Inflation Risk premium ILB returns 2.5% Term premium 0.5% Cash returns 2.0% 0% 1% 2% 3% 4% 5% 6% 7% Source : SIM

  2. CPI+5% (Domestic) What could you expect given these RETURN assumptions Source : SIM

  3. What returns can you expect?

  4. 10 years to 31 May 2012 Source : SIM – ALSI, ALBI, STeFi, J255T (prop), MSCI World, JPM Gbl Bond, 3m USD LIBID

  5. CPI+5% (Domestic) What could you expect given these RETURN assumptions Source : SIM

  6. Portfolio construction

  7. Thank you

  8. SIM’s current positioning 1 March 2011

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