AGENDA - Royal Commission

ASL NM Super Board Papers - September 2016 - Agenda

AGENDA

Concurrent Meetings of the AM P Superannuat ion Limited (ASL) B oard ABN 31008414104

and N.M. Superannuation Proprietary Limited (NM Super) Board ABN 31 008 428 322

To be held on Tuesday 20 September 2016 from 10.30 am

In the Boardroom, Level 25, 33 Alfred Street, Sydney

Quorum: Three (3) Directors for each Board, with the majority present being independent Directors.

AMP.6000.0128.5191

Declaration of interests: Recognising any interests arising by virtue of Directors' executive positions, Directors are required to declare any other material personal interests, direct or indirect, in the matters to be considered at this meeting.

1. Material Personal Interests and Conflicts of Interest I Chairman

2. Administration

2.1 Minutes of the Board meeting held 11 August I Chairman

2.2 Business Arising I Chairman

2.3 Secr.etari.alB..epor:t I Cassandra Hamlin

3. Trustee Services

3.1 Manag_eme.n.t_Beport I Rachel Sansom, Brigid McGettigan

3.2 Operational Risk Financial Requirement Strategy I Rachel Sansom

4. Board Audit Committee Update I Michele Dolin

4 .1 8-o.a.rd.Au.d.iLC_o.mmi.tte_e__c.hai.m.eLs~ns_Rep_o.r:I

4.2 ASL Public Offer Funds

4.3 t:iM..SJmer Public Qffer Funds

5. Business Monitoring Model I Natalie Sultana

Entity

All

All

All

All

All

All

All

ASL

NMS

5.1 Business Monitoring Model - 0 2 2016 / Natalie Sultana All

5.2 Exception Report: Operations I Sean O'Malley, David Pearson All

5.3 Exception Rep_ort: Sui:ier & Investment Product I Patricia All Montague, Lisa Phyland

5.4 Exception Report: North Guarantee / Ian Brown NMS

5.5 Exception Report: Claims I Megan Beer, Jen Mitchell All

6. Presentation

6.1 Insurance and Claims I Megan Beer, Jen Mitchell

7. Business Initiatives

7.1 Super Eerformance Investment Update I Mark Beardow, David Rowe

All

All

Action Paper Est. Time

Note Attached 10.30am

Approve Attached

Note Attached

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Approve Attached

Note Attached

Approve Attached

Approve Attached

Note Attached

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(Smins)

10.35am

(Smins)

10.40am

(15mins)

10.55am

(10mins)

11 .0Sam

(25mins)

11 .30am

(20 Mins)

11 .SOam

(30 mins)


Briefing for lunch

Lunch with Greg Tanzer, ASIC

8. Presentation

8.1 UQQate on Coroorate SuQ.fil I Vicki Doyle

9. Utigation Report I Larissa Baker Cook

10. Risk Management

10.1 Enterprise Risk Management Update I David Barry, Fotine Kotsilas

10.2

11. Remuneration I Lucy Harpham

12. Other Business I All

13. Chairman's Session I Chairman

13.1 Feedback on Board Papers

Close

AMP Non-Executive Directors Strategy Session commences at 2.45pm

Directors:

Rick Allert (Chairman)

Michele Dolin

Louise Dudley

Darryl Mackay

Brian Salter

Also Attending:

Full meeting

Full meeting

Full meeting

Full meeting

Full meeting

Cassandra Hamlin, Company Secretary

Lionel Mateo, Company Secretary - Elect

Rachel Sansom, Director of Trustee Services

Natalie Sultana, Senior Manager, Trustee Governance

Lucinda Mccann, Head of Legal, Financial Products

Brigid McGettigan, Senior Manager. Trustee Operations

Sean O'Malley, Director of Contact Centre

David Pearson, Head of Underwriting Operations (via Teleconference)

Patricia Montague, Director Superannuation & Investment Platforms

Lisa Phyland, Head of Product Effectiveness

Ian Brown, Head of Pricing Strategy and Frameworks

Megan Beer, Director, Insurance

2

Entity

All

All

All

All

All

All

All

Action Paper

Note Attached

Note Attached

Note Attached

Note Attached

Note Attached

Note Verbal

Note Verbal

Items 1-12

Items 1-12

Items 1-12

Items 1-1 2

Items 1-12

Item 3.1

Item 5.2

Item 5.2 Item 5.3

Item 5.3

Item 5.4

Items 5.5-6.1

AMP.6000.0128.5192

Est. Time

12.20pm (10mins)

12.30pm (60 mins)

1.30pm (20 mins)

1.50pm (10mins)

2.00pm (20mins)

2.20pm (10mins)

2.30pm (Smins)

2.35pm (Smins)

2.40pm

2


Jen Mitchell, Head of Claims

Mark Beardow, Chief Investment Officer, AMP Life

David Rowe, Chair, AMP Investment Committee

V icki Doyle, Director Corporate Super

Larissa Baker-Cook, Head of Litigation and Dispute Resolution

David Barry, CRO, Insurance & Super, Operations and Customer Solutions

Fotine Kotsilas, Senior Manager, ERM Insurance & Trustee Services

Lucy Harpham, Head of Executive Remuneration and Governance

3

Items 5.5-6.1

Item 7.1

Item 7.1

Item 8.1

ltem9

Items 10.1-10.2

Items 10.1-10.2

Item 11

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ASL NM Super Board Papers - September 2016 - Business Initiatives

CONFIDENTIAL

AMP~

... David Rowe Mark Beardow Chair, AMP Investment Committee CIO AMP Life & NMLA

MEMORANDUM FOR: Board of AMP Superannuation Limited (ASL) and Board of N.M. Superannuation Proprietary Limited (NM Super)

FROM: Chair, AMP Investment Committee and CIO AMP Life & NMLA

SUBJECT: Super Investment Performance Update

DATE: 6 September 2016

Recommendation

The Boards of ASL and NM Super (the Boards) note this investment performance update.

Purpose

The purpose of this memorandum is to provide the Boards with an update on the performance of some key investment options, in light of recent industry surveys and news articles.

Executive Summary

AMP Capital manages the majority of the diversified investment options for superannuation members. The investment management model seeks to effectively utilise the expertise of AMP Capital and this paper reflects the insights of AMP Capital and CIO AMP Life & NMLA.

The first section of this paper focuses on how MySuper Lifecycle is performing relative to its objectives. The second section reflects an analysis undertaken in response to an article "How Australia's Top-Performing Super Funds Rank" that was featured in the Austral ian Financial Review (AFR) on the 30 July 2016. This article reviewed the performance and performance drivers of the top performing super funds for the 2016 financial year, and over five and ten years. The article included performance charts, which depicted the AMP Responsible Investment Leaders (RIL) Balanced Fund and AMP ipac Super Directions Balanced Fund as the second and third poorest performing funds for the 2016 financial year.

MySuper Update

The overarching objective of the AMP/NM LA MySuper Lifecycle range is to grow a member's super savings so as to provide a comfortable retirement outcome. As the name suggests, the investment horizon of a lifecycle strategy spans a member's whole working life so it is important that the strategy can adapt to how members' priorities and risk appetite changes through time.

AMP Capital's investment objectives centre on the delivery of appropriate super outcomes over the long-term, as well as a focus on delivering to medium term goals. The framework for measuring success of the MySuper Lifecycle range is based on three measures:

• Objective 1 (long-term): Achieve adequate retirement savings. Grow member savings to provide a comfortable retirement outcome in line with the ASFA Retirement Standard1 for a comfortable lifestyle.

' The ASFA Retirement Standard benchmarks the annual budget needed by Australians to fund either a comfortable or modest standard of living in the post-work years. http://Www.superannuation.asn.au/resources/retirement-standard

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• Objective 2 (long-term): Deliver a positive real absolute return. Generating returns that exceed inflation - measured against real absolute return targets (CPI plus) over a ten-year time horizon on an after fees and tax basis.

• Objective 3 (medium-term): Deliver additional value through active investment decisions. As an active manager, AMP Capital seeks to deliver additional value through its investment decisions - measured against a passive market-weighted benchmark over the medium-term (3-5 years) on a before fees and tax basis.

The MySuper Life Cycle range was launched on 1 March 2014. Absolute performance and performance relative to the Neutral Asset Allocation (NAA) and CPI objectives as at 31 July 2016 is summarised below. However, the time frame for measuring and assessing NAA relative performance (3-5 years) and CPI objective relative performance (10 years) have not been reached.

Table 1. Gross Performance as at 31 July2016

1 YEAR(%) 2 YEARS (% pa) !SINCE INCEPTION (% pa) CPI Obj Relative Relative to Relative Relative to Relative to Relative to Pre Tax Return to NAA CPI Obj Return toNAA CPI Obj Return NAA CPI Obj

1990s* +5.5% 1.8 0.2 -4.8 8.2 1.3 1.4 8.7 1.2 1.7

1980s* +5.5% 1.8 0.2 -4.8 8.1 1.2 1.3 18.7 1.2 1.6

1970s +5.0% 2.2 0.3 -3.9 8.1 1.1 1.8 8.6 1.1 2.1

1960s +3.5% 3.1 -0.4 -1.5 7.0 0.4 2.3 17.6 0.5 2.7

1950s +3.0% 3.0 -1 .2 -1.1 6.1 -0.1 1.8 7.0 0.3 2.6

Capital Stable+2.5% 3.0 -1.5 -0.5 5.9 -0.3 2.1 16.9 0.1 2.9

Table 2. Net Performance as at 31 July 2016

1 YEAR (%) 2 YEARS (% pa) SINCE INCEPTION (% pa)

CPI Obj Relative to CPI Relative to CPI Relative to CPI Post Tax Return Obj Return Obj Return Obj

1990s* +5.5% 1.5 -4.6 6.9 0.6 17.4 0.9

1980s* +5.5% 1.5 -4.5 6.9 0.6 17 5 1.0

1970s +5.0% 1.9 -3.7 6.9 1.1 17 4 1.4

1960s +3.5% 2.3 -1.7 5.6 1.3 6 1 1.6

1950s +3.0% 2.0 -1 .5 4.7 0.9 ~ 4 1.4

Capital Stable +2.5% 2.0 -1 .0 4.5 1.2 ~.2 1.7

Net Performance= Returns are net or investment fees and platform fees (1%) and superannuation tax. CPI Obj Post Tax= CPI Target reduced by 0.5% ' CPI plus objectives were reduced to 5.0% (pre tax) and 4.5% (post tax) at June Super Board, to be effective 1 November 2016 when member disclosures are updated. NM= The neutral asset allocation reflects different points in time along the glide path. For active management performance measurement, this is a passive market-weighted benchmark. As an example, the Australian equity component of AMP MySuper is benchmarked to the S&P/ASX200 Accumulation Index. If investment decisions add value. active returns will be positive (i.e. performance will be higher than the NM benchmark.

On a before fees and tax basis since inception all the Lifecycle options have outperformed their NAAs, delivered positive absolute returns and exceeded inflation. Similarly, all options have outperformed the CPI objective since inception on a post fee, post-tax basis.

More recently, performance relative to NAA has weakened, particularly in the 1950s and Capital Stable options, where a larger underweight position to fixed income and overweight to cash is held. This active position is maintained in these options (where the structural weight to bonds is higher) to provide protection should yields surprise on the upside.

The size of the MySuper portfolios has grown substantially since inception owing to the Accrued Default Amount (ADA) transitions. For the first 16 months of existence, the MySuper investment portfolios were not at the desired target weight across unlisted asset classes (such as direct property, direct infrastructure and private equity) which performed very well. A neutral weight (relative to a forced underweight, given size considerations) to these assets for most of this period would have positively benefitted returns across all the options since inception.

While performance relative to the CPI objectives should be measured over the long term, AMP Capital is cognisant that an extended period of lower financial marker returns presents a challenge to meeting the CPI objectives for our younger options (1990s and 1980s). This challenge was

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presented to the Super Boards in June 2015 (as part of the AIC Investment Update) and also noted in the Super Boards' Annual SAA Review in June 2016. In these papers, the AIC and AMP Capital recommended the CPI targets be lowered from 5.5% to 5.0% (pre tax) and 5.0% to 4.5% (after tax) for the younger options.

The core objective of the MySuper lifecycle strategy is to provide a comfortable retirement outcome and this is regularly assessed by monitoring how each option is progressing toward this income goal. Across all cohorts, member balances remain in the "comfortable retirement" band and the following two charts demonstrate current progress for the 1970s and 1950s cohorts.

1950s

Age

1970s

AFR Article

E>q:1ected ccmfcnable C>COme "' 1ewerruwn

E>q:1ec!Od mod•ot lnocm. In rt...., en I

- Expeeted in*'equ..ie .,..,,,,. In re-.en1

- MP MY5<J1>« 19505 SIJpennnuaucn Bdanee

• Auumed ~ boliln ..

Expected ccmlon.llle ""°"'•Ill reli<ement Expectod modMI ncome n r-•rnent

- Expected lnad-lte'1come111 rewement

- MP MyS.p. 1970.. S<ipor111111uot>on e.tance

• """"' ed stw1lnli bal.,,ce

The performance of the AMP diversified funds included in the Chant West survey (and subsequently the AFR article) are depicted below as well as key Chant West survey metrics.

Table 3. Performance as at 30 June 2016

Option Growth I 1 Yr 5 Yrs 10 Yrs

Fee & Tax Basis Defensive % % %pa %pa

AMP RIL Balanced (Gross) 70/30 0.9 9.0 6.0 Gross

AMP RIL Balanced (Net) 70/30 0.3 8.4 5.4 Net IM fees

AMP RIL Balanced (Net Net) 70/30 0.8 8.0 5.3 Net IM fees & Tax

RIL SAA Benchmark 71/29 3.9 89 5.5 Gross

CPI+ 3.5% 4.5 5.4 5.9 Gross

AMP ipac SD Balanced (Gross) 69/31 0.8 9.0 5.7 Gross

AMP ipac SD Balanced (Net) 69/31 0.5 86 5.1 Net IM fees

AMP ipac SD Balanced (Net Net) 69/31 0.9 7.9 4.7 Net IM fees & Tax

SD SAA Benchmark 69/31 2.8 8.7 5.5 Gross

CPI+ 3.5% 4.5 5.4 5.9 Gross

Chant West Universe b/m (61-80)

Chant West Universe Upper qrtl 4.3 8.6 6.0 Net IM Fee & Tax

Chant West Universe Median 3.0 8.2 5.4 Net IM Fee & Tax

Chant West Universe Lower qrtl 1.9 7.8 4.9 Net IM Fee & Tax Ne & Net IM Fee= Investment Management fees. excludes administration/platform fees. RIL = 0.65% pa. SO= 0.76% pa. Net Net & Net IM Fee & Tax = Net IM Fee and Super Tax

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RIL Balanced Fund

As at 30 June 2016 Objectives

Achieve a return of 3.5% above inflation over the suggested minimum investment time frame (5yrs) after investment management fees and before tax.

Exceed the Chant West Multi-Manager Survey (growth segment) Median (competitor universe) after tax and management fees over the suggested minimum investment time frame (5yrs)

Provide a total return, before tax, after management fees. higher than the return from the benchmark mix• index over the recommended investment time frame (5yrs)

1 year 5 years

+3.0%pa

-0.9%pa

-0.6%pa

•The benchmark mix index is the average weighted return of the market indices used to measure the performance of the underlying funds in which the Fund invests. at the benchmark asset mix. The 1 year returns have been provided for comparison purposes only.

2016 Financial Year (FY) Performance

After fees and before tax, the RIL Balanced Fund underperformed its benchmark by 3.6% over the 2016 financial year. For the same period after investment fees and tax, it underperformed the Chant West Median by 2.2%. The RIL Balanced SAA benchmark returned 3.9%, while the Chant West Median returned 3.0%. Therefore, while the SAA was competitive with peers, active management was the significant driver of underperformance relative to peers.

The underperformance relative to its Chant West peers was principally due to:

1) Underperformance relative to benchmark SAA. For the reasons outlined below.

2) A lower asset allocation to direct assets, such as property and infrastructure. The RIL Balanced Fund has an allocation of 7.5% to direct assets, while its industry fund peers hold twice that amount and more. See below a small sample.

Table 4. Comparison of allocations to unlisted assets

Balanced Unlisted Assets Balanced Unlisted Assets Average# Unlisted Assets Fund' (%Weight) Fund* (%Weight) (%Weight)

QSuper 20 MTAA 22 Industry 19 UniSuper 15 Hostplus 25 Retail 4 Catholic Super 14 Russell 9 -

•source: Internet search of Balanced Fund disclosures.# APRA Quarterly Superannuation Performance Publication June Quarter 2016. Refer to Appendix B for a full asset allocation comparison.

Over the previous 12 months direct assets have posted strong returns relative to equity markets. Refer to Appendix A for a comparison of market returns for growth assets. The strong performance of unlisted assets has been driven by; (1) investors searching for yield in the low yield environment; and (2) the fall in discount rates due to the fall in bond yields.

The underperformance relative to its SAA benchmark on a Gross basis of 3. 0% was due to:

1) Asset Allocation (-1.55%)

A tilt away from Australian equities in favour of international equities, particularly to European and emerging market equities. Whilst this positioning contributed strongly to performance over 2015, it was a key detractor over the first six months of 2016. The Fund continues to hold these positions, albeit the Europe position was reduced in recent months for risk management purposes and in light of increased headwinds for the European financials. The AMP Capital Dynamic Asset Allocation (DAA) process continues to signal relative attractive valuations and improving earnings growth momentum for Europe and emerging markets, relative to the US and Australia.

The largest DAA position over the period was an underweight to global fixed income in favour of cash. This position detracted given the fal l in bond yields to record lows, and is reflected in the performance of the Barclays Global Aggregate Index (AUD hedged) which returned 9.3%, while cash returned just 2.2% (Bloomberg Ausbond Bank Bill Index) over the period. AMP Capital retains this bias to cash to provide protection should yields surprise on the upside.

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2) Security Selection (-1.48%) Primarily driven by negative security selection from the underlying developed market international equity managers. The underlying managers are Lazard and Investec, which have underperformed the benchmark by 5.63% and 8.13%, respectively. However, longer term performance has been strong for these strategies. The three key drivers of this underperformance were:

i. FY 2016 was a difficult market environment for active managers. The median global equity manager underperformed the MSCI World Ex-Australia Index by 1.36% over the 12 month period. The risk-on risk-off environment was challenging for active managers, as the market sought safety in expensive defensives in risk-off environments, while eager to own bombed-out cheap cyclical stocks during risk-on periods. The underlying RIL managers seek to invest in quality companies with reasonable growth prospects at reasonable prices. These types of companies have been overlooked by the market over the past 12 months.

ii. Stocks excluded by the "Responsible Investing" overlay performed well. About 20% of the underperformance can be attributed to the companies that the underlying managers cannoUwon't own such as tobacco, uranium, alcohol, armaments and companies with low ESG ratings. These companies in aggregate outperformed the benchmark over the 12 month period.

Although the underlying managers' performance has been disappointing over the 12 month period, AMP Capital is satisfied the managers have not deviated away from the investment process that was bought into. Both managers' historical performance and current underperformance is consistent with what the strategies experienced during GFC and European Financial Crisis. Subsequent to those periods, the managers delivered a strong bounce in performance once market conditions stabilised. The RIL Portfolio Manager, in conjunction with the Multi Asset Group (MAG) Manager Selection team, continues to monitor and assess performance and developments of all the underlying investment managers. Notwithstanding the underlying managers are performing to their mandates, MAG is currently researching alternative managers that could enhance RIL's line-up and provide additional diversification in volatile market conditions.

Longer term Performance

After investment fees and tax, over 5 years, it underperformed the Chant West Median by 0.9% pa. Over 10 years it underperformed the Chant West Median by 0.1 % pa.

The longer term underperformance relative to benchmark has been driven by the underperformance for the 12 months to 30 June 2016 as demonstrated by the following table.

Table 5. RIL Balanced performance as at 30 June 2016 relative t o 30 June 2015.

1 Yr% 3 Yrs %pa 5 Yrs %pa 7 Yrs %pa

As at 30 June 2015

RIL Balanced Fund 11 .01 15.04 10.84 7.41

SAA Benchmark 9.57 13.34 10.02 6.68

Relative 1.44 1.70 0.82 0.73 As at 30 June 2016 RIL Balanced Fund 0.90 8.55 9.01 9.28 SAA Benchmar1< 3.93 8.98 8.91 9.32 Relative -3.03 -0.43 0.10 -0.04

Prior to FY 2016's performance, the longer term performance of RIL Balanced had strong contributions from the following active strategies: 1) An overweight to international equities;

2) An underweight to fixed income and overweight to cash; and

3) Positive security selection in Australian and international equities.

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! CONTAINS CONFIDENTIAL INFORMATION l i ! i !

ASL NM Super Board Papers - September 201 6 - Business Initiatives

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CONFIDENTIAL

AMP ipac Super Directions (SD) Balanced

Objectives

Achieve a gross return of 3.5% above inflation over the suggested minimum investment time frame (5yrs)

Provide a return (net of tax and investment management costs) over a rolling 5-year period, that exceeds the return from published benchmarks for each asset class

Is competitive with comparable funds that have similar risk characteristics and allocation to growth assets of 65% to 75%

As at 30 June 2016

1 year 5 years

+3.6%pa

-0.8%pa

-0.3%pa

·rhe benchmark mix index is the average weighted return of the market indices used to measure the performance o f the underlying funds in which the Fund invests. at the benchmark asset mix.# The Morningstar Multisector Growth Median (60%-80% growth assets) Survey has been used. Its return over 1 year was 2.0%, 5 years was 8.2%pa and 10 years was 5.0%pa (after IM Fees & Tax)

2016 FY Performance

While the ipac SD Balanced Option was quoted against the Chant West peers in the AFR article, its stated peer group is the Morningstar Super Survey (Multisector Growth). After investment fees and tax, the option underperformed the Morningstar median by 1.1 % for FY 2016.

After investment fees and tax, the fund underperformed the Chant West Median by 2.1 %. The underperformance relative to Chant West peers is primarily due to the limited exposure to direct assets (under 2%). A more meaningful comparison for the ipac SD Funds is the Morningstar Superannuation Survey, which is one of the funds stated objectives. In July, the ipac SD funds were removed from the Chant West Survey given it is an inappropriate peer comparison.

The underperformance relative to the Chant West median was due to:

1) Underperformance relative to benchmark, due to negative security selection (see below).

2) A zero asset allocation to direct assets, such as property and infrastructure (see previous comments re RIL Balanced).

3) A minimal allocation to AREITS, which rallied over the year by 24.6% (the average Chant West Peer has twice the allocation of Super Directions to AREITS).

The underperformance relative to benchmark was due to: 1) Security Selection (-1.97%)

Primarily driven by the underperformance of the underlying international equity managers. One of the underlying managers, Pzena (a deep value manager) significantly underperformed (-10.06%) and LSV (a quant value manager) underperformed (-2.69%). Both of these managers suffered given their 'Value' style bias. (Also see RIL Balanced comment regarding active international equity manager performance.) The Fund's allocation to emerging markets also detracted from performance, having significantly underperformed developed markets (-9.65%) (see Appendix A).

The real asset (property/infrastructure) exposure for ipac SD is largely in global REITS and global listed infrastructure - with a little in A REITS. These listed real assets underperformed their unlisted counterparts over the past eighteen months, but have outperformed in previous periods (see Appendix A).

Longer term Performance

After investment fees and tax, over 5 years, it underperformed the Morningstar Median by 0.3% pa. Over 10 years, it underperformed the Morningstar Median by 0.3% pa.

David Rowe Chair, AMP Investment Committee

364

Mark Beardow CIO, AMP Life & NMLA

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ASL NM Super Board Papers - September 201 6 - Business Initiatives

CONFIDENTIAL

Appendix A - Growth Asset Market Returns

As at 30 June 2016

Market Representative Index or Fund 1Yr% 3Yr%pa 5Yr% pa

Equit ies

lnt'I Equities (Unhedged) MSCI World (ex-Aust) Accum. Index (AUD) 0.40 14.79 14.90

lnt'I Equities (AUD hedged) MSCI World (ex-Aust) Accum. Index (AUD hedged) -1.42 10.86 11.25

Emerging Markets Eq. (Unhedged) MSCI Emerging Markets Accum. Index (AUD) -9.22 5.44 3.46

Australian Equities S&P ASX 200 Accumulation Index 0.56 7.65 7.39

Real Assets

Direct Property Mercer/IPD Australian Pooled Property Fund Index 12.01 10.12 9.56

Direct Infrastructure Australia Pacific Airports Fund 33.16 22.91 20.11

Direct Infrastructure Aged Care Investment Trusts 34.27 44.51 25.28

Direct Infrastructure Community Infrastructure Fund 7.72 n/a n/a

Global Listed Infra. (AUD Hedged) Dow Jones Brookfield Global Infra. Net Acc. Index (AUD

6.60 12.99 14.78 Hedged)

Global REITs (AUD Hedged) FTSE EPRA/NAREIT Developed Rental Net Index (AUD

18.66 14.28 13.04 Hedged)

A REITs S&P/ASX 200 A-REIT Accumulation Index 24.57 18.48 18.05

• There is no readily available benchmark to represent direct infrastructure investment. The AMP Capital infrastructure funds are referenced to indicate the performance of direct infrastructure assets over the periods.

Appendix B - Asset Allocation Comparison

APRA Quarterly Superannuation Performance Publication June Quarter 2016

Asset Class Industry Funds (%Weight) Retail Funds (%Weight)

Cash 11 15

Australian fixed income 9 15

International fixed income 8 8

Australian listed equity 21 27

International listed equity 23 20

Unlisted equity 5 2

Listed property 3 6

Unlisted property 8 2

Listed infrastructure 2 1

Australian unlisted infrastructure 4 0

International unlisted infrastructure 2 0

Commodities 0 0

Other - Hedged Funds 4 4

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