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Review of IOOF MultiMix Trusts December Quarter 2011

Review of IOOF MultiMix Trusts December Quarter 2011. Presented by: <IOOF Investment Team> IOOF Investment Management Limited. Date: <Enter Date>. Disclaimer.

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Review of IOOF MultiMix Trusts December Quarter 2011

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  1. Review of IOOF MultiMix Trusts December Quarter 2011 Presented by: <IOOF Investment Team> IOOF Investment Management Limited Date: <Enter Date>

  2. Disclaimer This presentation is issued by IOOF Investment Management Limited (IIML) ABN 53 006 695 021 AFSL 230524. IIML is a company within the IOOF group of companies, consisting of IOOF Holdings Limited ABN 49 100 103 722 and it's related bodies corporate. This presentation is of a general nature only and is not intended to represent or be a substitute for specific financial or investment advice. The information presented does not take into account any investor's objectives, financial situation or investment needs. You should obtain and consider a copy of the Product Disclosure Statement available from our website www.ioof.com.au before you acquire a financial product. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Neither IIML nor any company in the IOOF group guarantees the performance of any fund or the return of an investor's capital. Past performance is not indicative of future performance. The Lonsec Limited (‘Lonsec’) ABN 56 061 751 102 ratings (assigned as follows: IOF0092AU – November 2011; IOF0098AU – November 2011; IOF0094AU – November 2011; IOF0095AU – November 2011; UFM0051AU – November 2011; IOF0093AU – November 2011; IOF0097AU – November 2011; IOF0090AU – November 2011) presented in this document are limited to ‘General Advice’ and based solely on consideration of the investment merits of the financial products. They are not a recommendation to purchase, sell or hold the relevant products, and you should seek independent financial advice before investing in these products. The ratings are subject to change without notice and Lonsec assumes no obligation to update the relevant documents following publication. Lonsec receives a fee from the Fund Manager for researching the products using comprehensive and objective criteria. Review of IOOF MultiMix Funds Dec 2011

  3. Agenda • Financial markets review – December 2011 • Market outlook • MultiMix sector trusts review – December 2011 • MultiMix diversified trusts review – December 2011 • Strategic tilting • Appendices Review of IOOF MultiMix Funds Dec 2011

  4. Financial markets review – December 2011

  5. Investment returns for major asset classes Source IRESS Review of IOOF MultiMix Funds Dec 2011

  6. Financial markets – quarter in review All major asset classes posted positive returns for December 2011 quarter Australian dollar rebounded in December quarter from US$0.97 to US$1.03 Hedged international shares returned 8.7% while unhedged returned 2.0% Developed markets outperformed emerging markets Best performing asset class was hedged international listed property with a return of 8.3% Solid returns from fixed interest as a result of softer global growth expectations and two interest rate cuts from 4.75% to 4.25% Review of IOOF MultiMix Funds Dec 2011

  7. Market outlook European crisis: some positive signs emerging though structural issues still persist United States: some positive economic signs emerging China: continuing to grow but some concerns emerging Australia: further rates cuts anticipated Equity Markets: positive start to 2012, remain cheap but susceptible to shocks Global fixed income: an expensive safe haven Currency markets remain volatile and are hostage to macroeconomic events Review of IOOF MultiMix Funds Dec 2011

  8. MultiMix sector trusts review – December 2011

  9. MultiMix Australian Shares Trust December 2011 Alliance Bernstein 16.2% Vinva16.4% Solaris18.4% Integrity 15.8% Perennial16.4% Legg Mason 8.7% Merlon8.1% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF Review of IOOF MultiMix Funds Dec 2011

  10. MultiMix International Shares Trust December 2011 Credit Suisse Asset Management 5.8% Perennial 4.3% Neuberger Berman 19.9% Wellington9.3% SSGA 36.6% LSV Asset Management 24.1% * International shares benchmark changed from MSCI World ex Australia $A Index (unhedged) from October 2011. Figures shown here are a composite of both indexes Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF Review of IOOF MultiMix Funds Dec 2011

  11. MultiMix Diversified Fixed Interest Trust December 2011 Perennial Enhanced 9.4% Loomis Sayles 11.7% PIMCO (Aust fixed interest) 11.3% IIML Income 7.0% IIML CMT 11.3% Cash 1.7% PIMCO (Intl fixed interest) 26.5% Perennial Australian Fixed Interest 21.1% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF Review of IOOF MultiMix Funds Dec 2011

  12. MultiMix Cash Enhanced Trust December 2011 Cash1.1% IIML 66.8% Perennial32.1% Performance is net of management costs and expenses Past performance is not a reliable indication of future performance. Source: IOOF Review of IOOF MultiMix Funds Dec 2011

  13. IOOF Wholesale Income Trust December 2011 Cash 0.9% Perennial Income Fund 99.1% Performance is net of management costs and expenses Past performance is not a reliable indication of future performance. Source: IOOF *Performance figure is a composite of UBSA bank bill index and the UBS Credit FRN Index. Review of IOOF MultiMix Funds Dec 2011

  14. IOOF Cash Management Trust • FUM: $1.5b • Weighted average duration: 60 days • Term deposits: 50% • Maximum exposure: CBA 33% • A1+ exposure: 84% • A1 exposure: 16% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF Review of IOOF MultiMix Funds Dec 2011

  15. MultiMix WholesaleAustralian Property Trust December 2011 Colonial First State 22.4% Challenger77.6% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF Review of IOOF MultiMix Funds Dec 2011

  16. MultiMix Wholesale International Property Trust December 2011 Cash 1.6% Perennial67.6% Cohen & Steers 30.8% Performance is net of management costs and expenses Past performance is not a reliable indication of future performance. Source: IOOF Review of IOOF MultiMix Funds Dec 2011

  17. MultiMix Wholesale Alternatives Trust December 2011 Alternative Debt Alternative Equity Review of IOOF MultiMix Funds Dec 2011

  18. MultiMix diversified trusts review – December 2011

  19. MultiMix Balanced Growth Trust December 2011 Alternatives10.4% Cash 6.8% Australianshares 29.1% Fixed interest 16.6% Property 7.1% International shares 30.0% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF *For further information on the strategic benchmark, please refer to a copy of the IOOF MultiMix Trust Product Disclosure Statement available from our website www.ioof.com.au Review of IOOF MultiMix Funds Dec 2011

  20. IOOF MultiMix Balanced Growth Trustdetractions (Quarter to December 2011) Zero hedged benchmark Zero hedged benchmark detracted from performance (US $0.97 to $1.03) Hedged international shares returned 8.7% while unhedged returned 2.0% Trust had unhedged stance over the December quarter and past 12 months Rationale for continued zero hedged benchmark Our view: AUD remains overvalued Commodity prices may be weaker Australian interest rates are likely to fall AUD classified as a risk asset Historically, markets fall, so too does A$ AUD a natural hedge Review of IOOF MultiMix Funds Dec 2011

  21. Fixed income Tilt away from global bonds to cash hurt as US Treasuries rallied US 10 year government bond yield unsustainably low at 1.88% at end of December, so we are maintaining tilt Underperformance of sector trusts Australian equities International equities International listed property Alternatives – growth Property Plus Fund IOOF MultiMix Balanced Growth Trustdetractions (Quarter to December 2011) Review of IOOF MultiMix Funds Dec 2011

  22. Overweight international versus Australian equities Australian equities outperformed unhedged international equities for the quarter However, over the 12 month period, unhedged international equities has outperformed Australian equities IOOF MultiMix Balanced Growth Trustdetractions (Quarter to December 2011) Review of IOOF MultiMix Funds Dec 2011 22

  23. IOOF MultiMix Balanced Growth Trustpositive contributions (Quarter to December 2011) Outperformance of Australian Listed Property sector Outperformance of Alternative – Debt Trust Fixed interest managers generally outperformed Review of IOOF MultiMix Funds Dec 2011 23

  24. Asset allocation update Review of IOOF MultiMix Funds Dec 2011

  25. MultiMix Moderate Growth Trust December 2011 Alternatives10.0% Australianshares 17.4% Cash 25.4% International shares 14.9% Property 7.0% Fixed interest 25.3% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF *For further information on the strategic benchmark, please refer to a copy of the IOOF MultiMix Trust Product Disclosure Statement available from our website www.ioof.com.au Review of IOOF MultiMix Funds Dec 2011

  26. IOOF MultiMix Moderate Growth Trustdetractions (Quarter to December 2011 Zero hedged benchmark Zero hedged benchmark detracted from performance ($A0.97 to $1.03) Hedged international shares returned 8.7% while unhedged returned 2.0% Trust had unhedged stance over the December quarter and past 12 months Rationale for continued zero hedged benchmark Our view: AUD remains overvalued Commodity prices may be weaker Australian interest rates are likely to fall AUD classified as a risk asset Historically, markets fall, so too does A$ AUD a natural hedge Review of IOOF MultiMix Funds Dec 2011 26

  27. Fixed income Tilt away from global bonds to cash hurt as US Treasuries rallied US 10 year government bond yield unsustainably low at 1.88% at end of December, so we are maintaining tilt Underperformance of sector trusts Australian equities International equities International listed property Alternatives – growth Property Plus Fund IOOF MultiMix Moderate Growth Trustdetractions (Quarter to December 2011) Review of IOOF MultiMix Funds Dec 2011 27

  28. IOOF MultiMix Moderate Growth Trustpositive contributions (Quarter to December 2011) Underweight equities (early December) Australian and international equities underperformed cash for the month of December Outperformance of some sector funds Outperformance of Australian Listed Property sector Outperformance of Alternative – Debt Trust Fixed interest managers generally outperformed Review of IOOF MultiMix Funds Dec 2011 28

  29. Asset allocation update Review of IOOF MultiMix Funds Dec 2011

  30. MultiMix Capital Enhanced Trust December 2011 Australian shares 9.1% Cash and short term securities 46.7% Property 5.1% Diversified fixed interest 39.1% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF *For further information on the strategic benchmark, please refer to a copy of the IOOF MultiMix Trust Product Disclosure Statement available from our website www.ioof.com.au Review of IOOF MultiMix Funds Dec 2011

  31. MultiMix Conservative Growth Trust December 2011 Australian shares 9.8% Alternative 7.9% International shares 7.1% Cash and Short term securities 33.3% Property 8.6% Diversified fixed interest 33.3% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF *For further information on the strategic benchmark, please refer to a copy of the IOOF MultiMix Trust Product Disclosure Statement available from our website www.ioof.com.au Review of IOOF MultiMix Funds Dec 2011

  32. MultiMix Hi Growth Trust December 2011 Cash and short term securities 2.9% Alternatives 8.1% Property 5.5% Diversified fixed Interest 4.7% Australian shares 39.5% International shares 39.3% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF *For further information on the strategic benchmark, please refer to a copy of the IOOF MultiMix Trust Product Disclosure Statement available from our website www.ioof.com.au Review of IOOF MultiMix Funds Dec 2011

  33. Multi Series Balanced Trust December 2011 Cash and short term securities 5.5% Australianshares 33.9% International shares 30.2% Diversified fixed interest 25.3% Australian listed property 5.1% Performance is net of management costs and expenses. Past performance is not a reliable indication of future performance. Source: IOOF *For further information on the strategic benchmark, please refer to a copy of the IOOF MultiMix Trust Product Disclosure Statement available from our website www.ioof.com.au Review of IOOF MultiMix Funds Dec 2011

  34. Strategic tilting update

  35. Currency/overseas assets Asset allocation committee decided to put more money offshore (Australian Equities to International Equities) for the Balanced Growth and Hi Growth Trusts (November 2010). All funds maintain a zero hedge target benchmark. The AUD is trading at historically high levels We see the following three main catalysts for Australian dollar weakness: increased risk aversion from the ongoing debt crisis in Europe RBA easing decline in commodity prices prompted by the economic slowdown in China Valuation on overseas shares was attractive – especially in the US The natural hedge – if markets fall, AUD falls – GFC example Tilt has outperformed by 4.3% as at 31 December 2011 Review of IOOF MultiMix Funds Dec 2011

  36. AUD/USD Source: Datastream Review of IOOF MultiMix Funds Dec 2011

  37. Global fixed interest/cash tilt • August 2010, 20% allocated to cash funded from global bonds within IOOF’s MultiMix Diversified Fixed Interest Trust • Rationale • US Gov’t bonds yields unsustainably low at 1.88% • Cash and term deposits currently have a high running yield with no duration risk • Status/Outcome • Since implemented, global bonds outperformed cash • Tilt has underperformed by approximately 2% as at 31 December 2011 Review of IOOF MultiMix Funds Dec 2011 37

  38. US 10 year government bond yield Source: IRESS Review of IOOF MultiMix Funds Dec 2011 38

  39. United diversiAAppendices

  40. News update MultiMix sector funds review – September 2011 • Chant West ratings confirmed January 2012 • Multi Series Balanced Trust Enhancements and Research House Feedback Review of IOOF MultiMix Funds Dec 2011

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