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Assumptions for Long-term returns: SA - Real
2.0%
2.5%
3.0%
6.0%
7.0%
0.5%
0.5%
3.0%
4.0%
0% 1% 2% 3% 4% 5% 6% 7%
Cash returns
Term premium
ILB returns
Inflation Risk premium
Bond returns
Property premium
Property returns
Equity Risk premium
Equity returns
Source : SIM
CPI+5% (Domestic)
Source : SIM
What could you expect given these RETURN assumptions
Domestic AllocationLong term real
returnWeighted average
Equity 35 7 2.45
Property 5 6 0.3
Bonds 15 3 0.45
ILB’s 15 2.5 0.38
Cash 30 2 0.6
Alpha 1
Total 100% 5.17%
What returns can you expect?
Long Term Real
Returns To Asset Classes
Conservative
[CPI + 2%]
Expected Real Return To Fund =
Asset Class Exposure X Real Return
To Asset Class
Cautious [CPI + 3%]
ModerateModerate
AggressiveAggressive
SA Equity 7% 10 10 x 7% 25 37.5 45 57.5
Intl Equity 6% 5 5 x 6% 5 7.5 10 12.5
TOTAL EQUITY 15 30 45 55 70
USD Cash 1% 5 5 x 1% 5 7.5
Intl Bonds 2% 5 10 7.5
SA Bonds 3% 30 30 x 3% 30 22.5 12.5 7.5
SA Cash 2% 50 50 x 2% 35 15 17.5 10
SA Listed Property 6% 5 5 5
EXPECTED REAL RETURN
3.0 2.95 3.7 4.5 5 5.7
Source : SIM – ALSI, ALBI, STeFi, J255T (prop), MSCI World, JPM Gbl Bond, 3m USD LIBID
10 years to 31 May 2012
CPI+5% (Domestic)
Source : SIM
What could you expect given these RETURN assumptions
Domestic AllocationLong term real
returnWeighted average
Equity 35 7 2.45
Property 5 6 0.3
Bonds 15 3 0.45
ILB’s 15 2.5 0.38
Cash 30 2 0.6
Alpha 1
Total 100% 5.17%
Asset Class Allocation
8.4%
12.6%
14.0%
BONDS 30.0%
10.0%
STeFI 20.0%
PROPERTY 5.0%
Annual Management Fee 0.75%
SIM Active Income Fund
SA Listed Prop Index
EQUITY
Index
FTSE/JSE Top40 Index
A Top Quartile General Equity Fund
SIM Bond Plus Fund
FTSE/JSE Dividend Plus Index
CASH
Asset Class Allocation
EQUITY 35.0%
BONDS 30.0%
10.0%
STeFI 20.0%
PROPERTY 5.0%
Annual Management Fee 0.98%
CASH
SA Listed Prop Index
Mean of the ASISA Domestic General Equity Category
Index
SIM Active Income Fund
SIM Bond Plus Fund
Annualised Performance
Annualised Standard Deviation
1 Year 13.10% 4.96
2 Years 14.09% 5.87
3 Years 15.46% 5.58
4 Years 12.46% 7.58
5 Years 9.62% 7.42
Annualised Performance
Annualised Standard Deviation
1 Year 9.91% 4.86
2 Years 10.66% 5.57
3 Years 13.35% 5.30
4 Years 9.64% 6.81
5 Years 8.04% 6.74
Portfolio construction
Thank you
Asset allocation Overweight Underweight Neutral
Domestic Equity Nominal Bonds
Inflation Linked Bonds
Cash
Property
GlobalEquity
Property
Cash
Bonds
SIM’s current positioning
1 March 2011