Putting local and international financial markets into context

1. Putting local and international financial markets into context Prepared by BT Financial Group for the adviser market Updated to 28 February 2009

2. 1. Australian share markets – the 1, 10 and 50 year view 2. How have international markets fared? 3. A quick look at the different asset classes 4. Getting some perspective on market volatility

3. The Australian share market has fallen 38% in the past 12 months S&P/ASX 300 Accumulation Index – 12 months to 28 February 2009 Series Rebased: 28 February 2008 = 100 Feb-08 Jun-08 Oct-08 Dec-08 Feb-09 Aug-08 Apr-08 Source: BT Financial Group, Premium Data 3

4. But over the past 10 years, it’s still up 81% S&P/ASX 300 Accumulation Index – 10 years to 28 February 2009 Series Rebased: 28 February 1999 = 100 Feb-99 Feb-03 Feb-07 Feb-09 Feb-05 Feb-01 Source: BT Financial Group, Premium Data 4

5. 2008 was a ‘1 in 50’ year event for Australian share market returns All Ords /ASX 300 Accumulation Index – 50 years to 2008 Source: Standard & Poor’s

6. But every period of negative returns is generally followed by increased gains All Ords /ASX 300 Accumulation Index – 50 years to 2008 Source: Standard & Poor’s

7. 1. Australian share markets – the 1, 10 and 50 year view 2. How have international markets fared? 3. A quick look at the different asset classes 4. Getting some perspective on market volatility

8. The major international markets also plunged in the past 12 months Series Rebased: 28 February 2008 = 100 Feb-08 Jun-08 Oct-08 Dec-08 Feb-09 Aug-08 Apr-08 FTSE 100 (UK) -35.8%, Nikkei 225 (Japan) -45.7%, S&P500 (US) -46.3%, DJ Euro Stoxx 50 (Europe) -47.8% Source: BT Financial Group, Premium Data 8

9. And it’s no wonder why – the linchpin of the global economy had its worst year in more than 50 years The US All Ords /ASX 300 Accumulation Index – 50 years to 2008 Source: Value Square Asset Management, Yale University

10. 1. Australian financial markets – a 12 month view 2. How have international markets fared? 3. A quick look at the different asset classes 4. Getting some perspective on market volatility

11. Growth assets have been the most affected by the rise in market volatility in the past year 12 months to 28 Feb 2009 12 months to 28 Feb 2008 Cash International listed property – hedged Australian listed property International bonds - hedged Australian bonds International shares - hedged International shares Australian shares Source: BT Financial Group

12. While cash saw stronger returns this past year, Aussie shares still outperform over the long-term 28 February 2009 Australian shares Listed property Australian bonds Global shares Cash Note: Accumulated returns based on $1,000 invested in December 1984 Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, UBS Bank Bill 0+ years 12

13. 1. Australian share markets – the 1, 10 and 50 year view 2. How have international markets fared? 3. A quick look at the different asset classes 4. Getting some perspective on market volatility

14. Annual returns of Australian shares (%) – All Ords / ASX S&P Accumulation Index (since 1956) 70 60 50 40 30 20 10 0 -10 -20 -30 1974 1977 1980 1983 1986 1989 1992 2004 2007 1956 1959 1962 1965 1968 1971 1995 1998 2001 Volatility can hurt returns in the short term… Source: Standard & Poor’s 14

15. Rolling 5 year returns of Australian shares (% annualised) – All Ords / ASX S&P Accumulation Index (since 1960) 35 30 25 20 15 10 5 0 -5 -10 1975 1978 1981 1984 1987 1990 1993 2005 1960 1963 1966 1969 1972 1996 1999 2002 …but it’s a different picture over the longer term Source: Standard & Poor’s 15

16. Rolling 10 year returns of Australian shares (% annualised) – All Ords / S&P Accumulation Index (since 1965) 30 25 20 15 10 5 0 -5 -10 1980 1983 1986 1989 1992 1995 2004 2007 1965 1968 1971 1974 1977 1998 2001 And the longer the better! Source: Standard & Poor’s 16

17. This presentation has been prepared by BT Financial Group Limited (ABN 63 002 916 458) ‘BT’ and is for general information only.  Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described.  The presentation has been prepared without taking into account any personal objectives, financial situation or needs.  It does not contain and is not to be taken as containing any securities advice or securities recommendation.  Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice.  BT does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this presentation.  Except insofar as liability under any statute cannot be excluded, BT and its directors, employees and consultants do not accept any liability for any error or omission in this presentation or for any resulting loss or damage suffered by the recipient or any other person.  Unless otherwise noted, BT is the source of all charts; and all performance figures are calculated using exit to exit prices and assume reinvestment of income, take into account all fees and charges but exclude the entry fee.  It is important to note that past performance is not a reliable indicator of future performance. This document was accompanied by an oral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author. For more information, please call BT Customer Relations on 132 135 8:00am to 6:30pm (Sydney time) 17