0912 Model Portfolio Construction Doc

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Zenith Investment Partners

Model Portfolio Construction Document

February 2010


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TABLE OF CONTENTS

1. The Model Portfolio Offering ........................................................................... 31.1. Accessing the Model Portfolios ..................................................................................... 31.2. Model Portfolio Reports .................................................................................................. 4

2. Objectives of the Portfolios ............................................................................. 53. Determining the Risk / Return Profiles ........................................................... 54. Strategic Asset Allocation ............................................................................... 6

4.1. Zeniths Strategic Asset Allocation ............................................................................... 64.2. Setting the Strategic Asset Allocation .......................................................................... 74.3. Investment Timeframe ..................................................................................................... 84.4. Strategic Asset Allocation Rebalancing ........................................................................ 94.5. Asset Classes within the Strategic Asset Allocation ................................................... 9

5. Tactical Asset Allocation ............................................................................... 116. Portfolio Characteristics................................................................................ 117. Fund Selection ............................................................................................... 118. Portfolio Performance Calculation ............................................................... 129. Median Managers ........................................................................................... 12


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1. The Model Portfolio Offering

Zenith offers its clients three options in regards to our model portfolio service:

Tailored Platform Portfolios;

Fully Customised Portfolios; ora combination of both Tailored Platform and Fully Customised Portfolios.

Each of the options are explained below:

Tailored Platform Portfolios: Tailored Platform Portfolios are a model portfolio solutionthat provide five portfolios (ranging from Conservative to High Growth) per administrationplatform. Tailored Platform Portfolios are available across all of the major administrationplatforms, including BT Wrap, Macquarie Wrap, Colonial First State FirstChoice andAsgard eWrap/Mastertrust. Clients can choose to purchase portfolios for a singleplatform, or multiple platforms to suit their requirements.

Zenith undertakes extensive ongoing due diligence for every fund in every portfolio. We

also closely analyse how each fund blends with the other funds in the portfolio to ensurean optimal exposure across each asset class and individual fund.

The portfolios are constantly monitored by Zenith, with detailed performance andattribution analysis conducted on a monthly basis. Performance issues with any of theunderlying funds are identified early and discussed with the fund manager if necessary.

To minimise the administrative burden on its clients, Zenith endeavours to keep theturnover of funds in the portfolios as low as possible. However, when a change isrequired, clients will be provided with a detailed explanation of the reasons for thechange.

Fully Customised Portfolios: Whilst the Tailored Platform Portfolios are designed to

cater for the requirements of most adviser groups, Zenith acknowledges that somegroups may have specialised requirements that are outside the scope of TailoredPlatform Portfolios. For this reason, Zenith also offers Fully Customised Portfolios, whereclients can incorporate their own unique requirements into the portfolios.

A clients unique requirements may include things like a different growth/defensive split tothe standard Zenith offering, or perhaps the exclusion of Alternative products in theportfolios.

The Fully Customised Portfolios are subjected to exactly the same rigorous ongoingmonitoring process that is applied to the Tailored Platform Portfolios.

Combination of both Tailored Platform and Fully Customised Portfolios: Someclients may choose to purchase a combination of both Tailored Platform Portfolios andFully Customised Portfolios, which Zenith can easily cater for.

1.1. Accessing the Model Portfolios

The model portfolios are accessed via a unique log-in to the www.zenithpartners.com.auwebsite. Once logged in, advisers can then click on the Portfolios tab, which provides adrop down list of all of the advisers model portfolios.

Once a particular portfolio is selected, the fund names and weightings are displayed, as wellas links to the four reports available for the portfolio. The screenshot below shows thedisplay after a portfolio has been selected from the drop-down list and the Display Portfoliobutton has been pressed.
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1.2. Model Portfolio Reports

There are four reports available for the model portfolios, accessed via links on the webpage.Samples of these reports are available via the home page of thewww.zenithpartners.com.auwebsite. The four available reports are explained below:

Report For Selected Portfolio: this report provides all the details for the selectedportfolio including: portfolio holdings and weightings; commentary on the funds used in

the portfolio and why certain funds have been blended together; and return, risk &consistency statistics for the portfolio compared to the median manager.

Product Profile Reports For All Funds In Selected Portfolio: this report consolidatesthe Product Profile reports for all funds in the selected portfolio into a single document. AProduct Profile report provides key details for a fund, including Fund Rating, Fees,Benchmark, Investment Objective, Manager Background, Investor Profile and basicPerformance Statistics. Product Profile reports are usually a single page each.

Product Assessment Reports For All Funds In Selected Portfolio: this reportconsolidates the Product Assessment reports for all funds in the selected portfolio into asingle document. A Product Assessment report provides the research findings of theZenith investment team for the particular fund and includes the Fund Rating, and anassessment of the funds Investment Process, Investment Team, Risks of the Fund and

Applications of the Fund. Product Assessment reports for each fund are generally around5-7 pages in length.

Report For All Portfolios: this report consolidates the Report For Selected Portfolio(mentioned above) for all available portfolios into a single document.
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2. Objectives of the Portfolios

Setting total return objectives for portfolios is a difficult task, as the return is dependent onthe performance of each of the underlying asset classes and fund returns. Whilst it is usefulto assess the historical risk and return characteristics of each of the asset classes, this is not

necessarily a reliable guide to future performance and volatility.

For this reason, Zeniths portfolio objectives are relative in nature, with the aim to outperformcompetitor products of a similar risk/return profile over the medium to longer term. In order todetermine the performance of competitor products, Zenith utilises a series of medianmanagers that match the risk/return profile of each of the Zenith portfolios. To enablecomparison, the performance statistics of the relevant median manager are shown alongsidethe performance of the portfolio in the model portfolio report.

For further detail on median manager calculations, please refer to Section 9 of thisdocument.

3. Determining the Risk / Return ProfilesZenith offers five risk / return profiles across its portfolio suite. The main consideration indetermining the split between growth and defensive assets across the portfolio suite was toensure that there was a meaningful and consistent step-up in risk and return. This approachensures that there is an appropriate portfolio available for all clients, regardless of the riskappetite. The five model portfolios offered by Zenith are as follows:

Conservative Moderate

Balanced

Growth High Growth


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The graph below displays the long-term risk and return statistics that Zenith believes may beachievable over the long-term (i.e. 10 years plus) for each of the portfolios. These numbershave been calculated based on a detailed analysis of the historical risk and returncharacteristics of each asset class index, as well as a consideration of fund manager excessreturns relative to the asset class indices.

4. Strategic Asset Allocation

4.1. Zeniths Strategic Asset Allocation

Zenith reviews the Strategic Asset Allocation of all portfolios on an annual basis to ensurethey remain consistent with the portfolios objectives and industry best practice. Zenithstypical Strategic Asset Allocation across each of the five Risk/Return profiles is shownbelow:

Conservative

Moderate

Balanced

Growth

High Growth

5%

6%

7%

8%

9%

10%

11%

2% 4% 6% 8% 10% 12% 14%

Return(%

pa)

Volatility (% pa)

Zenith Model Portfolios - Efficient Frontier

Conservative Moderate Balanced Growth High Growth

Australian Shares 5.5% 13.0% 21.5% 30.0% 39.5%

International Shares 5.5% 13.0% 21.5% 30.0% 39.5%

Australian Listed Property - 4.0% 5.0% 6.0% 6.5%

International Listed Property 4.0% 4.0% 5.0% 6.0% 6.5%

Alternatives 5.0% 6.0% 7.0% 8.0% 8.0%

Total Growth Assets 20.0% 40.0% 60.0% 80.0% 100.0%

Fixed Interest 70.0% 52.5% 35.0% 20.0% -

Cash 10.0% 7.5% 5.0% - -

Total Defensive Assets 80.0% 60.0% 40.0% 20.0% 0.0%


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4.2. Setting the Strategic Asset Allocation

The decision making process in determining the underlying Strategic Asset Allocation of theportfolios incorporates several quantitative and qualitative inputs.

The process begins with an analysis of the interaction of each asset class with one anotherusing Correlation Matrices over several time periods. Asset class pairs that have asustained low correlation over multiple time periods can potentially indicate a diversificationopportunity for portfolios.

An example of a typical Correlation Matrix used by Zenith is shown below:

Further work is then done to assess the optimal weight that a particular asset class could beused in a portfolio. Zenith uses a proprietary Diversification Model to provide some guidancein terms of the allocation between asset classes.

An extract of the model is provided as an example below, which shows how adding

Managed Futures to a Moderate Portfolio would impact on portfolio volatility. Despite the factthat Managed Futures have a higher stand alone Volatility than the Moderate Portfolio, thegraph below shows that up to a weighting of around 40%, the addition of Managed Futureswould have actually decreased the overall Volatility of the combined portfolio. This is a resultof the low correlation that Managed Futures has with traditional asset classes.

5 Year Correlation

AustralianShares

AustralianSmallCo

mpanies

InternationalShare

s(unhedged)

InternationalShare

s(hedged)

AustralianListedProperty

GlobalListedPrope

rty

AustralianFixedInterest

InternationalFixed

Interest

AustralianCash

HedgeFund-o

f-Funds

GlobalResourcesS

ecurities

GlobalInfrastructu

reSecurities

ManagedFutures

Australian Shares 1.00 0.92 0.60 0.91 0.73 0.73 -0.36 0.06 -0.43 0.77 0.73 0.87 -0.01

Australian Small Companies 0.92 1.00 0.51 0.92 0.65 0.75 -0.44 0.08 -0.48 0.80 0.76 0.89 -0.02

International Shares (unhedged) 0.60 0.51 1.00 0.62 0.64 0.57 0.12 -0.09 -0.04 0.31 0.34 0.55 -0.16

International Shares (hedged) 0.91 0.92 0.62 1.00 0.73 0.86 -0.34 0.10 -0.38 0.76 0.72 0.91 -0.06

Australian Listed Property 0.73 0.65 0.64 0.73 1.00 0.75 -0.03 0.21 -0.28 0.46 0.37 0.72 -0.18

Global Listed Property 0.73 0.75 0.57 0.86 0.75 1.00 -0.17 0.19 -0.36 0.50 0.45 0.77 -0.18

Australian Fixed Interest -0.36 -0.44 0.12 -0.34 -0.03 -0.17 1.00 0.43 0.39 -0.54 -0.45 -0.32 -0.07

International Fixed Interest 0.06 0.08 -0.09 0.10 0.21 0.19 0.43 1.00 -0.14 -0.12 -0.06 0.16 -0.12Australian Cash -0.43 -0.48 -0.04 -0.38 -0.28 -0.36 0.39 -0.14 1.00 -0.36 -0.35 -0.33 0.16

Hedge Fund-of-Funds 0.77 0.80 0.31 0.76 0.46 0.50 -0.54 -0.12 -0.36 1.00 0.85 0.76 0.24

Global Resources Securities 0.73 0.76 0.34 0.72 0.37 0.45 -0.45 -0.06 -0.35 0.85 1.00 0.68 0.26

Global Infrastructure Securities 0.87 0.89 0.55 0.91 0.72 0.77 -0.32 0.16 -0.33 0.76 0.68 1.00 -0.05

Managed Futures -0.01 -0.02 -0.16 -0.06 -0.18 -0.18 -0.07 -0.12 0.16 0.24 0.26 -0.05 1.00


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While the Diversification Model is extremely useful in highlighting how the addition of anasset class will impact on portfolio volatility, clearly a 40% allocation to Managed Futureswould be an excessive exposure for most investors. Therefore, there is also a significantqualitative component to the Strategic Asset Allocation process, where we leverage offZeniths extensive inhouse knowledge ofthe risk and return inherent in all mainstream assetclasses.

4.3. Investment Timeframe

The investment timeframe for each portfolio is determined after careful consideration ofexpected volatility, expected negative returns and predictability of return outcomes.

Based on the historical volatility of the model portfolios, Zenith has calculated the followingRisk of Negative Return statistics for each of the five model portfolio types.

Risk of Negative Return

Conservative Portfolio 1 in 36 Years

Moderate Portfolio 1 in 10 Years

Balanced Portfolio 1 in 6 Years

Growth Portfolio 1 in 5 Years

High Growth Portfolio 1 in 5 Years

Another useful input in setting the Investment Timeframe is the analysis of return funnelgraphs. Return funnel graphs use long-term index data and model the variability of returnsover different time periods.

An example of a typical Growth Portfolio is show below, with 20 years of data used in theunderlying model. The graph clearly shows that the variability of returns is much higher overshorter-term periods. For example, if an investor had invested in a typical Growth Portfoliofor only a 1 year period (at any time over the past 20 years), their return outcome could havebeen anywhere between +33% and -26%. Far better predictability of returns was achievedby investing for periods of 5 years or longer, where the difference between the maximum

return and minimum return was much tighter. Zenith analyses models such as this for all riskprofiles (i.e. High Growth, Growth, Balanced etc).

0%

1%

2%

3%

4%

5%

6%

7%

8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

AnnualisedVolatility

Allocation to New Fund (%)

Diversification ModelVolatility Impact of Adding Managed Futures to a Moderate Portfolio

Zenith Composite Modera te Port fo lio Managed Fu tures Comb ined Port fo lio


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-30%

-20%

-10%

0%

10%

20%

30%

40%

1 Year 2 Years 3 Years 5 Years 7 Years 10 Yrs

Return(%

pa.)

Example Growth Portfolio

Maximum Return Minimum Return Average Return

Zenith utilises the above Risk of Negative Return and Return Funnel modelling indetermining its recommended investment time frames for each of the five model portfoliotypes that we offer. The recommended investment time frames across each of the ZenithModel Portfolios are shown in the table below:

Investment Timeframe

Conservative Portfolio 2 3 Years

Moderate Portfolio 3 4 Years

Balanced Portfolio 4 5 Years

Growth Portfolio 5 7 Years

High Growth Portfolio 7+ Years

4.4. Strategic Asset Allocation Rebalancing

As a minimum, Zenith recommends that advisers rebalance their portfolios on an annualbasis, but preferably more frequently.

Regular rebalancing ensures that the portfolio does not stray too far from the desired assetallocation, and avoids over exposure to any particular asset class.

4.5. Asset Classes within the Strategic Asset AllocationThe following includes a brief discussion on how each of the major asset classes are used inmodel portfolios.

4.5.1. Australian Shares

Australian shares funds form a core component of the Zenith model portfolios. The primaryexposure to Australian shares is achieved using funds that focus on large capitalisationstocks, which have historically provided solid capital growth and reasonable levels ofdividend income. The majority of large cap funds historically used in the Zenith portfolioshave been long-only, however, long/short funds will also be used from time to time.

Small companies funds are also used where applicable, particularly for Balanced, Growthand High Growth portfolios, where the allocation to growth assets is higher. High qualitysmall companies funds are an attractive addition to portfolios as they can potentiallyenhance long-term returns.


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4.5.2. International Shares

As with Australian shares, international shares funds also form a core component of theZenith model portfolios. Zenith has tended to use a combination of long-only and long/shortfunds in its international shares portfolios. Whilst international shares offer a slightly lowerdividend yield than Australian shares, Zenith believes the total return available from high

quality international shares funds should be comparable to Australian shares funds over thelong term. For this reason, Zenith tends to have an equal allocation to Australian andinternational shares in its model portfolios.

Zenith includes two other sub-asset classes in its overall exposure to international shares,specifically: global resources securities; and global infrastructure securities. Globalresources securities essentially encompasses resources & mining stocks listed on globalstock exchanges, and can provide strong diversification to a portfolio when usedappropriately. Global infrastructure securities includes those listed companies that specialisein infrastructure projects. Infrastructure securities tend to offer a higher yield and lowervolatility than the broader international shares sector, and therefore an exposure toinfrastructure securities in model portfolios can be used to not only enhance diversification,but also to increase the overall income generation of the portfolio.

In order to ensure that there are not too many funds used in portfolios, Zenith tends tomainly introduce global resources securities funds and global infrastructure securities fundsin Growth and High Growth portfolios.

In regards to the currency exposure of international shares funds, Zenith aims to achieve anapproximate 50/50 allocation between hedged and unhedged funds. Zenith released a paperin 2009 that provided our findings that a 50/50 allocation has historically achieved lowervolatility than taking on a 100% unhedged or 100% hedged exposure.

4.5.3. Property

Property exposure is achieved using listed property securities funds. Property provides

strong diversification benefits and can also enhance the model portfolios income profile.

Whilst Australian property securities funds have long been available, the relatively recentemergence of global listed property funds in the Australian market has provided furtheropportunity for diversification. Global listed property offers higher growth potential with loweryields than what is generally available from Australian listed property funds.

Zenith typically allocates 50% of the property exposure of a portfolio to Australian listedproperty and 50% to global listed property.

4.5.4. Fixed Interest

Fixed interest is used to provide the defensive (capital preservation) exposure of the model

portfolios. Zenith aims to achieve diversification across three distinct fixed interest segments,specifically: Australian government bonds; international government bonds; and credit (i.e.corporate fixed interest securities).

Government bonds typically provide stability and downside protection, while an exposure tocredit can be used to enhance the model portfolios income profile.

Zenith tightly manages the fixed interest component of the portfolios to ensure that there isadequate diversification. It is critical to ensure that the portfolios are not overly exposed toany single factor risk.

4.5.5. Alternatives

Zenith is a strong advocate of the use of Alternatives funds in model portfolios, as we believethat high quality Alternatives funds can significantly enhance portfolio diversification, lowervolatility and potentially enhance long-term returns.


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There are a wide range of Alternatives products available, including Managed Futures,Hedge Fund-of-Funds, Multi-Strategy and Global Macro.

It is critical that appropriate weightings are assigned to Alternatives products in modelportfolios, as over exposure can lead to a risk profile that is beyond what was intended.

Zenith spends a lot of time analysing how each of the different types of Alternatives productscorrelates with traditional asset classes, which is a significant input into the portfolioweighting process.

5. Tactical Asset Allocation

Zenith does not undertake Tactical Asset Allocation (TAA), as we believe the risksassociated with making an incorrect Tactical Asset Allocation call far outweigh the potentialbenefits of making a correct call.

In addition, we believe that the logistics of implementing a tactical asset allocation decisionin a timely manner are impractical and costly for most financial advisory groups. In mostcases, implementing a TAA decision would require a Statement of Advice to be issued to

each of the advisers underlying clients, which can be a time consuming process that wouldmute any potential benefit of switching quickly between asset classes.

We strongly believe that by setting a sound long-term Strategic Asset Allocation, andrebalancing on a regular basis, clients will meet their long-term investment objectives withoutthe need for tactical tilts to the portfolio along the way.

6. Portfolio Characteristics

To assist our clients in determining the suitability of each portfolio, we provide estimates inregards to the income, growth, total return and volatility characteristics for each portfolio.

Note that the ranges provided in the table below are to be used as a guide only and are longterm estimates (five years plus). Over shorter term periods, the characteristics are expectedto move outside of these ranges, sometimes significantly.

Portfolio Characteristics1

Portfolio TypeIncome(% pa)

Growth(% pa)

Total Return(% pa)

Volatility(% pa)

Conservative Portfolio 5.0 - 6.0 0.5 - 1.5 5.5 - 7.5 3.0 - 4.0

Moderate Portfolio 4.8 - 5.8 1.7 - 2.7 6.5 - 8.5 4.5 -5.5

Balanced Portfolio 4.5 - 5.5 3.0 - 4.0 7.5 - 9.5 6.5 - 7.5

Growth Portfolio 4.0 - 5.0 4.5 - 5.5 8.5 - 10.5 9.0 - 10.0High Growth Portfolio 3.5 - 4.5 6.0 - 7.0 9.5 - 11.5 12.0 - 13.0

7. Fund Selection

Fund selection for the portfolios leverages off Zeniths intensive fund due diligence processand, in general, only those funds that are rated Highly Recommended or Recommended areconsidered for the portfolios. On occasion, an Approved rated product may be used if thereis no suitable higher rated product available on a particular administration platform.

1Note: It is important to realise that the income estimate is based on the expected yield of the underlying asset classes, and has not taken into account therealised capital gains, which will be variable over time. The one exception is the Alternatives asset class which, due to Australian tax laws, has traditionallypaid out the majority of its return as realised capital gain and therefore we have included the expected return from Alternatives in the income column.Realised capital gains transfer some of the return from the growth component to the income component, effectively increasing the income paid out of thefund.


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A primary consideration when selecting a fund for the portfolio is how the fund will blend withother funds in the portfolio. For example, when building the Australian shares component ofthe portfolio, it is important to ensure that the portfolio is not overly exposed to value orgrowth style funds. Highly Recommended funds will be used where possible, however, if aparticular Highly Recommended fund does not offer the required exposure for the portfolio

(eg. A Highly Recommended growth-style fund is available, but the portfolio requires avalue-style fund), then Zenith is happy to use Recommended rated funds.

All funds that carry a current Zenith rating are subject to ongoing due diligence, where theyare closely monitored in regards to a range factors, including: any changes in investmentpersonnel, changes to investment process; deterioration of investment performance; orchanges at an organisational level.

8. Portfolio Performance Calculation

Performance of the Zenith model portfolios is calculated based on the weighted net returnsof the underlying funds in the portfolio. For the purposes of performance calculations, it isassumed that the portfolios are reweighted to their Strategic Asset Allocation on a monthly

basis. While we realise that monthly rebalancing is not practically possible for most advisergroups, this is the standard industry practice for model portfolio return calculations.

The figures shown in the Zenith model portfolio reports display the performance of theportfolio after the fees of the underlying funds have been deducted, but before any wrapplatform fees are deducted. The exception to this is for platforms such as Colonial FirstStates FirstChoice platforms, where the manager fee and platform fee are not separatedand therefore, in those cases, the model portfolio returns are net of both fees.

In addition to the return of the portfolio, Zenith also calculates a range of risk andconsistency statistics which are displayed in the model portfolio reports. These statisticsinclude:

Standard Deviation;

Sharpe Ratio;

% of Positive Months;

% of Negative Months; and

Longest Losing Streak.

9. Median Managers

As discussed in the Objectives of the Portfolio section (Section 2) of this report, Zenith aimsto outperform competitor products of a similar risk/return profile over the medium to longerterm. In order to determine the performance of competitor products, Zenith has created aseries of median managers, drawn from the universe of diversified funds, which match therisk/return profile of each of the Zenith portfolios.

The calculation of the median manager is best illustrated using an example. The medianmanager used for performance comparison with the Zenith Balanced Portfolio has anallocation of 60% growth assets and 40% defensive assets (60/40 Median).

There are currently 42 funds in the universe used for calculating the 60/40 Median. Some ofthese funds will have a slightly higher risk profile than 60/40, and some will have a slightlylower risk profile than 60/40, however, the median allocation of growth and defensive assetsacross this universe is exactly 60% growth assets and 40% defensive assets. Performance

statistics for the 60/40 Median are then drawn from the median performance statistics of thisuniverse, and displayed for comparative purposes in the Zenith Balanced Portfolio report.The entire 42 fund universe used for the 60/40 Median is shown on the following page.


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Funds in 60/40 Median Universe Growth AssetsDefensive

Assets

Barclays Managed Inv Funds Diversified Stable Fund 33.0% 67.0%

BT Wholesale Conservative Outlook Fund 34.0% 66.0%

BT WS Partner Funds - WS Multi-Mana. Conservative Fund 35.0% 65.0%

UBS Defensive Investment Trust 35.0% 65.0%

Aviva Investors Income Plus Growth Trust 40.0% 60.0%

BT Income Plus Fund 40.0% 60.0%

Officium Cautious Fund 40.0% 60.0%

Credit Suisse Sustainable Income Fund 40.0% 60.0%

Mercer Income Plus Fund 45.0% 55.0%

Perpetual Wholesale Diversified Growth Fnd 50.0% 50.0%

Advance Moderate Multi-Blend Fund WS 50.0% 50.0%

All Star Income Fund 50.0% 50.0%

Colonial First State Wholesale Balanced 50.0% 50.0%

MLC Inv Trust Conservative Growth (Multi-Manager) Fund 50.0% 50.0%

Russell Diversified 50 Fund - Class A 50.0% 50.0%

Vanguard Balanced Index Fund 50.0% 50.0%

Zurich Blended Series Balanced 50.0% 50.0%

BT Wholesale Tax Effective Income Fund 55.0% 45.0%

Officium Conservative Fund 57.5% 42.5%

BlackRock Global Allocation Fund (Aust) - Class D 60.0% 40.0%

CFS FC WS Inv - Wholesale Moderate 60.0% 40.0%

ING Wholesale Balanced Trust 60.0% 40.0%

Select Defensive Portfolio 60.0% 40.0%

Officium Balanced Fund 62.5% 37.5%

BT Wholesale Balanced Returns Fund 66.0% 34.0%

Perennial Balanced Wholesale Trust 67.5% 32.5%

Macquarie Master Balanced Fund 68.8% 31.3%

Schroder Balanced Fund Wholesale Class 69.0% 31.0%

Perennial Partners Trust 70.0% 30.0%

Advance Balanced Multi-Blend Fund WS 70.0% 30.0%

BlackRock Wholesale Balanced Fund 70.0% 30.0%

Colonial First State Wholesale Diversified 70.0% 30.0%

Credit Suisse Asset Management Capital Growth Fund 70.0% 30.0%

Goldman Sachs JB Were Diversified Growth WS Fund 70.0% 30.0%

ING OA Inv Pfolio - ING Tax Eff Income 70.0% 30.0%

ING Wholesale Managed Growth Trust 70.0% 30.0%

MLC Wholesale Horizon 4 Balanced Portfolio 70.0% 30.0%

SSgA Passive Balanced Trust 70.0% 30.0%

Vanguard Growth Index Fund 70.0% 30.0%

Legg Mason Diversified Trust - Class A 70.0% 30.0%

Russell Balanced Fund - Class C 70.0% 30.0%

Zurich Blended Series Managed Growth 70.0% 30.0%

Median 60.0% 40.0%


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Author: Glen Franklin, Associate DirectorZenith Investment Partners Pty Ltd

(03) 9642 3320 [email protected]:This report is prepared exclusively for clients of Zenith Investment Partners (Zenith). The report contains recommendations and advice of ageneral nature and does not have regard to the particular circumstances or needs of any specific person who may read it. Each client shouldassess either personally or with the assistance of a licensed financial adviser whether the Zenith recommendation or advice is appropriate totheir situation before making an investment decision. The information contained in the report is believed to be reliable, but its completenessand accuracy is not guaranteed. Opinions expressed may change without notice. Zenith accepts no liability, whether direct or indirect arisingfrom the use of information contained in this report. No part of this report is to be construed as a solicitation to buy or sell any investment.The performance of the investment in this report is not a representation as to future performance or likely return. The material contained inthis report is subject to copyright and may not be reproduced without the consent of the copyright owner. Zenith usually receives a fee forassessing the fund manager and product(s) described in this document against accepted criteria considered comprehensive and objective.

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