ABC BULLION SUPERANNUATION& PRECIOUS METALS REPORT

Thank you for downloading the ABC Bullion Superannuation & Precious Metals Report. We are glad you have taken an interest in understanding how physical gold and silver can help you build wealth and enhance your superannuation fund.

This report focuses on four key areas:

1. The benefits of including physical precious metals in your superannuation2. The advantages of having a Self-Managed Superannuation Fund (SMSF)3. ABC Bullion’s specialist SMSF offering in conjunction with our partner Superannuation Accounting4. The steps involved in setting up and running a SMSF

Whilst we cannot provide financial advice at ABC Bullion, we are big believers in superannuation, SMSF, and the importance of physical precious metal ownership. We trust that you will find this report full of useful information, which can help you maximize you retirement funds.

If you would like to arrange a time to discuss this report and our offering in more detail, please email us at comms@abcbullion.com.au, call us on 1300 361 261 or we welcome you to visit our showroom.

We look forward to discussing this opportunity further with you.

Janie SimpsonMANAGING DIRECTOR

ABC Bullion@ABCBullion

2 Superannuation & Precious Metals Report

Used effectively, superannuation is the ultimate long-term savings vehicle, giving Australians the opportunity to build up a significant pool of funds, which they can enjoy in retirement.

Superannuation has many benefits, including significant tax advantages whilst you are working. Better yet, when you retire, all the assets accumulated to that date in your superannuation become tax-free. These tax advantages can be worth tens of thousands of dollars.

As physical gold and silver are the ultimate long-term savings assets, many investors look to ensure their superannuation portfolio has a healthy allocation to precious metals as well as more traditional assets such as shares and bonds.

Some of the reasons to include gold and silver in your superannuation portfolio include:

• Gold returns have been very strong these past 10 years, up over 10% per annum, outperforming the median balanced growth superannuation fund, and some of their underlying assets, as you can see in the table below

• Performance over the long run (+40 years) has also been strong, with gold returning 9% per annum on average. This is relevant as most people will have money invested in superannuation for 40 - 50 years

• Returns for gold and silver tend to be even stronger when ‘real’ interest rates are low, like they are today. In environments like this, gold prices have risen by over 20% per annum on average, outperforming more traditional investments like shares and bonds, as the table below highlights

1. WHY INVESTING IN PRECIOUS METALS USING SUPERANNUATION MAKES SENSE

• Gold and silver are uncorrelated to equity markets. This means, when the stock market (where most superannuation money is invested) falls, gold tends to rise, often substantially, as the table below highlights. A healthy mix of both stocks and gold often leads to better overall portfolio returns, with less risk of your portfolio falling along the way

DIVERSIFICATION: GOLD VS. STOCKS WHEN STOCKS FALL (%)

Year ASX ReturnPhysical

Gold (AUD) Return

Difference

2008 -40.4 28.0 68.4

1974 -26.9 87.0 113.9

1973 -23.3 49.0 72.2

1990 -17.5 -0.5 17.1

1982 -13.9 28.9 42.8

Average -24.4 38.5 62.9

Source: Cor Capital, IRESS, ABC Bullion, Chant West

LONG-TERM PERFORMANCE RETURNS TO END DECEMBER 2014 (%)

Asset Class 1yr 5yr 10yr 15yr

Physical Gold (AUD) 9.0 3.6 10.1 8.3

Australian Shares 5.3 6.5 7.4 8.0

International Shares (Unhedged)

15.0 12.5 5.5 1.5

Australian Listed Property

26.8 12.0 1.8 6.7

International Listed Property

29.4 17.5 8.3 N/A

Unlisted Property 9.0 9.4 8.8 9.6

Australian Bonds 9.8 7.3 6.5 6.8

International Bonds (Hedged)

10.4 8.4 7.7 8.1

Hedge Funds 4.1 5.9 5.8 6.3

Retail Superannuation Funds (Growth)

8.6 8.0 6.2 5.8

Source: ABC Bullion, IRESS, Cor Capital, Chant West, RBA, US T Bonds

PERFORMANCE OF PHYSICAL GOLD (AUD), STOCKS & BONDS IN

ENVIRONMENTS WHERE ‘REAL’ INTEREST RATES ARE 2 PERCENT OR LESS (%)

Physical Gold (AUD) Stocks Bonds

24.2 12.7 7.9 Source: RBA, IRESS, Cor Capital

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• Gold and silver are an easy way to benefit from the rising wealth of both China and India. These two countries are already the largest gold buyers in the world, and demand has risen alongside the growth in per capita incomes, as the following charts from the World Gold Council show. With high savings rates, favourable demographics and rising incomes, demand from both countries will continue to strengthen in the coming year

Source: World Gold Council

• Gold and silver remain the best hedge and portfolio protection in today’s uncertain world of excessive debt, rising unemployment and global money printing

(a) Chinese gold expenditure per capita vs. income per capita

Gold expenditure per capita (Yuan Renminbi )

Gold expenditure per capita (Rupee)

(b) Indian gold expenditure per capita vs. income per capita

4 Superannuation & Precious Metals Report

With the right help, SMSFs can be easy to operate, cost effective, and bring a wealth of advantages. Indeed, you might be surprised to know that SMSFs are the fastest growing and largest segment of the superannuation industry. Over 1 million Australians now choose to ‘self-direct’ their retirement funds, and collectively control over $600 billion. You will be in good company if you join this group.

The major advantages of having a SMSF include:

• Investment Flexibility: Traditional superannuation funds are limited with what they will let you invest in. For example, you cannot own physical gold and silver, even though they have outperformed traditional superannuation funds and their underlying assets over the 15 years to end December 2014. It is not only physical precious metals that are allowed in a SMSF, but also other investments like boutique share funds, property, and art. Having a SMSF gives you the flexibility to invest in a much wider range of assets, which can help boost returns and manage risks

• Cost Savings: According to Rainmaker Research, the average Australian could pay up to AUD $175,000 in superannuation fees over their working life, possibly more. For a couple, the total fees will be closer to AUD $350,000, and you will be charged even more in retirement, especially if you stay in a traditional pension. ABC Bullion has a SMSF solution that can be run for as little as AUD $1,175 per annum, including administration and auditing. Over a 30-year period, that is a saving of around AUD $130,000 for an individual, and over AUD $300,000 for a couple

•

• Control: In a traditional superannuation fund, the company managing the money is the trustee, meaning they, not you, have legal control of your assets. With a SMSF, legal control lies in your hands

• Tailored Insurances: Holding insurances inside superannuation can be a great way to free up cash flow. The problem is that insurances within traditional superannuation are not tailored to your specific needs. With a SMSF, you can customize an insurance solution that works best for you and your family

• Involving the family: One of the biggest advantages of a SMSF is the opportunity to have up to 4 members. This means that you and your partner can combine your assets into one fund, and potentially your children or siblings as well. This allows for even greater fee savings over time and gives you a larger pool of assets to invest with

Superannuation is by far the largest financial asset most Australians will build over their working lives. Having your own SMSF, controlled by you, and built for your specific needs (rather than you being just one of tens if not hundreds of thousands of members of a larger fund) can be a great way of maximizing this key asset.

2. SELF-MANAGED SUPERANNUATION FUNDS (SMSFs) & THEIR MANY ADVANTAGES

Fees subject to annual review.

*Model is an estimate only. Calculations Based on $50,000 Superannuation Balance today, Salary of $75,000 per annum, with a 3% pay rise, 10% SG contribution and investment growth of 5% per annum.

*Retail fund fee charged at 1.75% per annum on total funds under management. Estimate of 1.75% fee based on Chant West Multi-Manager Quarterly Survey March 2012

*SMSF fee based on $330 set, $1,175 per annum administration cost and $259 per annum ATO levy plus 0.16% investment fee for balanced investments using Exchange Traded Funds and Physical Gold.

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In response to overwhelming client demand, ABC Bullion have partnered with specialist SMSF accounting company Superannuation Accounting, a leading provider in their field, to offer SMSF set up as well as ongoing administrative support.

For a fixed set up fee of $385 for an Individual as Trustee (or $1,200 for Company as Trustee), Superannuation Accounting can assist you with the following steps that are required to set up and run a SMSF:

• Creation of your SMSF Trust deed and the election of trustees

• Provide a template for your SMSF investment strategy

• Registration of your fund including application for an ABN and TFN, which are required to operate a SMSF

Starting from $1,295 per annum, Superannuation Accounting can assist you with the ongoing reporting and the annual audit that is required when you operate a SMSF. This annual service includes:

• Annual Financial Statements, including operating statement, statement of financial position, notes to financial statements

• Fund’s annual return (income tax return), calculate and advise of tax liability or tax refund due

• Audit of the SMSF by an approved auditor• Member benefit statements• Detailed investments reports• Manage communications and correspondence

with Australian Taxation Office

Note that both the set up and ongoing fees Superannuation Accounting charge can be paid from

the SMSF bank account, eliminating out of pocket expenses for clients, with the ongoing administration fees a tax deductible expense for the SMSF. The advantages of utilising the service ABC Bullion and Superannuation Accounting provide include:

• Discounted premiums on selected gold and silver products purchased through ABC Bullion

• Discounted storage on SMSF investments with ABC Bullion or in a private vault with Custodian Vaults

• Priority access to all ABC Bullion Seminars and Events

• Quarterly updates on developments in the SMSF and broader superannuation industry, highlighting opportunities for you to maximize your SMSF, as well as helping you stay on top of your obligations as trustees

For those who already have a SMSF, Superannuation Accounting also offer complimentary SMSF take over and trust deed upgrade, if you decide to move your existing SMSF administration and auditing.

3. ABC BULLION SMSF OFFERING

P: 1300 735 254 F: 02 9221 0564 E: info@superaccounting.com.au

superaccounting.com.au

Fees subject to annual review.

6 Superannuation & Precious Metals Report

Setting up a Self-Managed Super Fund involves a number of key steps.

Firstly, you need to decide on the trustee structure for your fund. You can either have an individual trustee structure, or a corporate trustee structure. The former is the most common, and is cheaper, though the latter has advantages too. Superannuation Accounting can provide you with information regarding the benefits of both options.

Once you have decided the trustee structure, Superannuation Accounting will then set up your SMSF for you. This will include providing you with:

• Full documentation for the fund including a trust deed, minutes/resolutions, membership application, trustee declaration, and other necessary documentation

• Registration of the SMSF to be a regulated super fund, as well as obtaining the SMSF’s ABN and TFN

Once you have an ABN and TFN, you can open a bank account in the name of your SMSF. This account can be opened with any Australian bank.

This will be the account where you direct your existing superannuation fund to rollover your superannuation monies to, and where you can ask your employer to direct future contributions.

It is also the account that you will use to pay for any investments you make in the name of the SMSF, including bullion purchased through ABC Bullion.

The entire process, from engaging Superannuation Accounting to create a SMSF for you, to having your money in your SMSF bank account, takes 6-8 weeks.

4. WHAT IS INVOLVED IN SETTING UP A SMSF

SETTING UP A SMSF - THE PROCESS

1. Complete the Super Accounting SMSF Set Up form and return to Super Accounting (This form can be downloaded from www.superaccounting.com.au or ABC Bullion can provide).

Once Super Accounting receives the form, they will prepare the fund trust deed and

complete registration for the fund

Once the SMSF is registered, Superannuation Accounting will forward you the complete SMSF pack with accompanying

instructions

2. Review the SMSF pack and complete necessary items.

3. Open a bank account for your SMSF

Once your SMSF is established, you can open a bank account in the name of your SMSF. Once this bank acount has been opened you are able to accept contributions and rollovers, as well as make investments in the name of your SMSF.

This will include documenting an investment strategy for your SMSF (a template is included). Once the signed documents are returned, Superannuation Accounting will register the SMSF with the ATO. Once registered, the SMSF is established. Superannuation Accounting will advise you of this.

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DISCLAIMER:This report is for educational purposes only and should not be considered either general or personal advice. It does not consider any particular person’s investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information contained in this report should be acted upon without the appropriateness of that information having regard to those factors. You should assess whether or not the information contained herein is appropriate to your individual financial circumstances and goals before making an investment decision, or seek the help of a licensed financial adviser. Performance is historical, performance may vary, past performance is not necessarily indicative of future performance. Tax information contained within this case study is also generic in nature, and investors should seek formal tax advice from their financial advisor, tax agent or accountant for specific taxation advice relevant to their circumstances. Any prices, quotes or statistics included have been obtained from sources deemed to be reliable, but we do not guarantee their accuracy or completeness.

SETTING UP A SMSF - THE PROCESS HOW YOUR SMSF BANK ACCOUNT WORKS

A PALLION COMPANY

AUSTRALIA WIDE1300 361 261 abcbullion.com.au

ABC BULLION HEAD OFFICESuite 30 Level 6 88 Pitt Street Sydney NSW 2000 AustraliaP: +61 2 9231 4511 | F: +61 2 9233 2227 | E: info@abcbullion.com.au

If you would like to arrange a time to discuss this report and our offering in more detail, please email us at

comms@abcbullion.com.au, call us on 1300 361 261 or we welcome you to visit our showroom.

Contributions

Pay Fund Expenses

Investment Earnings

Rollovers