centuria policyholder presentation 28 october

Policyholder Meeting

October 2011Sean Webster, Investment Manager, Centuria Life Limited

Centuria Life

Information in this presentation is general information only in relation to the investments in the Investment Bonds managed by the Centuria Life Limited.

In preparing this presentation we have not taken into consideration any persons personal circumstances, objectives or needs.

Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Centuria Life Limited

Policyholder Meeting 2

Disclaimer

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

The Global Economy

The Australian Economy

Where to from here?

Managing your bonds

Summary



What we will cover




The Global Economy


What does the global economy look like?

Economic growth is buoyant.



The Global Economy


The United States – double dip recession?

United States GDP Growth Rate

Source: Trading Economics.com; Bureau of Economics Analysis

6

4

2

0

-2

-4

-6

-8

Jan / 07 Jan / 08 Jan / 09 Jan / 10 Jan / 11



The Global Economy


Global debt issues

Global government budget woes will persist for some time.



The Global Economy


Asian economies

Strength of SE Asian economies continues.



The Global Economy


China

China continues to boom (for now).

China GDP Growth RateAnnual GDP Growth Adjusted by Inflation

Source: Trading Economics.com; Bureau of Statistics

14

12

10

8

6

14

12

10

8

6

2002 2004 2006 2008 2010





What does the Australian economy look like?

The Australian economy rebounds.Strong GDP growth expected.





Growth drivers - coal and iron exports

Exports at record levels.Commodity prices (iron ore) increasing, despite periods of volatility.





How big is this resource and energy investment boom?

Mining investment is the major growth driver.





How big is this resource and energy investment boom?

Scale of the mining projects is world class.





What about the Australian consumer?

Consumer savings rebound.…..as consumer spending falls.





Government spending

Budget surplus expected in 2013/14.





The equity market

The equity market struggles…



Where to from here?


The outlook for Australia

Interest rates likely to decline very gradually (1 cut in Q1) unless there is a global banking crisis.

Economic growth likely to remain strong (2-3% p.a.) supported by energy and resource investment, driven by Chinese and SE Asian growth.

Unemployment likely to be stable with some upside bias.

Inflation likely to remain in RBA band for 12 to 18 months.

Commodity and energy prices likely to move sideways with some downward potential if global growth slows further.



Where to from here?


Risk factors

Debt default in Greece, Spain and or others.

US economy slows into recession (“double-dip”).

Government and central bank mismanagement.

Debt burden in the global economy.

China slows significantly and resources prices drop sharply.



Investment Bond Management


How are we managing your bonds?

Diversification is critical - no big bets on a single investment.

Have moved to higher fixed interest and cash holdings.

Actively allocate assets as the environment changes.





Fixed Interest has performed well - reasonable rates are available from high quality investments.

Unlisted property is offering good yields.

Listed Property returns will be mainly from income.

Equities returns are likely to be in line with yield ~ 4.5%.





Stable consistent returns in a volatile environment

The value of $100 invested in the Centuria Capital Guaranteed Bond in November 2007 compared to other major growth asset classes

© 2011 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee this data or content to be accurate, complete or timely nor will they have any liability for its use or distribution.

140

120

100

80

60

40

20

0

Nov - 07 May - 08 May - 09Nov - 08 Nov - 09 May - 10 May - 11Nov -10

Capital Guaranteed Bond Listed PropertyAustralian Equity International Equity

Source: Morningstar Adviser Workstation



Summary


Conservative investment philosophy

Capital guaranteed bonds:

Returns will be positive and in line with last year, though dependent on the interest rate environment. Capital preservation will continue to be a core focus. Sound income streams from investing in high quality defensive assets. Unitised bonds:

Aim to deliver competitive after tax returns while managing risk.



Appendix






Capital Guaranteed (bonus credited) Bonds

June 2010 1 year returns (%)


4.67

3.37

Gross Net Gross Net

Bond

3.10

2.10

4.08

3.40

2.85

2.00

Capital Guaranteed

Income Accumulation





Unitised Bonds


6.14%

11.30%

10.16%

8.38%

12.02%

Gross Net

Bond

3.55%

7.40%

6.48%

4.98%

7.18%

Australian Property & Mortgage Bond Fund

Australian Shares Fund

Balanced Fund

Growth Bond

High Growth Fund

centuria policyholder presentation 28 october

Documents

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licensed financial adviser

general information

global economyinformation

investment manager

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