Riding the Wave of Rising Rates Without Sacrificing Yield...Riding the Wave of Rising Rates Without...

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Riding the Wave of Rising Rates Without Sacrificing Yield July 27, 2017

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S&P Dow Jones Indices emphasizes to participants that Dhruv Nagrath and

Nathan Ide are guest speakers and are not affiliated with S&P Dow Jones

Indices and that S&P Dow Jones Indices is not providing endorsements as to

the opinions expressed which are those of the guest speaker for this webinar.

S&P Dow Jones Indices offers no guarantees or warranties as to the

accuracy and reliability of opinions expressed.

Guest speakers are not affiliated with S&P Dow Jones Indices and S&P Dow

Jones Indices does not sponsor, endorse, sell, or promote any product based

on an S&P Dow Jones index nor does it make any representation regarding

the advisability of investing in the products.

Disclaimer

For Financial Professionals Only 3



Senior Director, Head of Channel Management – Australia and New Zealand

S&P Dow Jones Indices

Stuart Magrath is Senior Director, Head of Channel Management, Australia and New Zealand at

S&P Dow Jones Indices. He focuses on the current and future financial aspects of the

accumulation and draw-down phases of the retirement community of both countries. As part of

Stuart's responsibilities he services the needs of different influencers including financial advisers,

accountants and self-managed superannuation fund members.

Stuart’s career has encompassed roles in marketing, e-commerce and customer experience

design in addition to direct, and intermediated, distribution experience across a diverse range of

industries including telecommunications, financial services, media and print publishing. Stuart

started his career with KPMG in their Tax Advisory business in Sydney followed by a number of

roles in publishing, both traditional and online, including with the Sydney Futures Exchange prior

to its merger with the ASX. In 2001, Stuart made the move into retail financial services, initially

with MLC, part of the National Australia Bank Group, followed by roles with ING Australia (now

OnePath), part of the ANZ Banking Group, AMP, Australia’s largest retail superannuation

provider, and most recently with Suncorp Group, leading the Superannuation Distribution

function through Suncorp Bank branches, as well as self-employed and aligned financial

advisers. Additionally, he held relationship responsibility for corporate superannuation plans.

Stuart is a graduate of the University of NSW, Sydney, with bachelor degrees in both Commerce

(Accounting) and Law. Stuart is also a graduate of the Australian Institute of Company Directors.

Stuart Magrath

4


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Senior Director, Index Investment Strategies


Tim Edwards is Senior Director of Index Investment Strategy for S&P Dow Jones Indices

(S&P DJI). The group provides research and commentary on the entire S&P DJI’s product

set, including U.S. and global equities, commodities, fixed income, and economic indices.

Prior to joining S&P Dow Jones Indices, Tim worked at Barclays Capital, where he had

global responsibility for product development of exchange-traded notes across all asset

classes, covering commodities, volatility, foreign exchange, fixed income and emerging

markets.

Tim holds a PhD in mathematics from University College London.

Tim Edwards

6



Vice President, iShares Product Strategist

BlackRock

Dhruv Nagrath, Vice President, is an iShares Product Strategist at BlackRock Australia.

He is responsible for supporting ETF adoption across both institutional and retail market

segments with market analysis, educational content and thought leadership. Mr Nagrath is

also member of the iShares Global Investment Strategy & Insights (ISI) Group. Global ISI

delivers macro and market insight, leveraging BlackRock’s thought leadership platforms to

provide clients with executable investment ideas using iShares ETFs.

Mr Nagrath joined BlackRock in July 2014. Prior to joining BlackRock he worked as a

lawyer in the litigation practice of a leading Australian commercial law firm. He earned a

Bachelor of Commerce with Honours in Finance in 2009 and a Bachelor of Laws with

Honours in 2011, both from the University of Sydney, Australia.

Dhruv Nagrath

7



Managing Director

Private Capital Management Pty Ltd

Nathan has over 12 years financial markets experience within Investment Banking and

Investment Management and has worked within some of the worlds largest banks. He has

presented at TED looking at Australia’s superannuation industry and has been a frequent

presenter at the Australian Securities Exchange.

Nathan attended St. Paul’s College, within the University of Sydney, and holds a Bachelor

of Commerce. He also has a Master of Business Administration from the University of

Sydney, and is licenced by ASIC to provide Financial (RG146) and Credit (RG209) advice.

Nathan S. Ide

8

http://www.ted.com/watch/ted-institute/ted-state-street/nathan-ide-democratizing-investing

Yield StrategiesIncome Across Asset Classes

Tim Edwards

Senior Director, Index Investment Strategy

July 2017

Australian Core Interest Rate 1990-2017

10

Sources: S&P Dow Jones Indices LLC, Reserve Bank of Australia. Data as of June 30, 2017. Chart provided for illustrative purposes only.


World Sovereign Bond Yields

11

-2

0

2

4

6

8

10

12

14

16

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

10

Y G

ov.

Bo

nd

Yie

ld (

%)

New Zealand (3.0%)

Australia (2.6%)

U.S. (2.3%)

Canada (1.8%)

UK (1.3%)

Germany (0.5%)

Japan (0.1%)

Benchmark Yields as of

30 June 2017

Sources: S&P Dow Jones Indices LLC, Factset. Data as of June 30, 2017.. For illustrative purposes only. Past performance is no guide to future performance


0%

2%

4%

6%

8%

10%

12%

14%

Jan-9

0

Jan-9

2

Jan-9

4

Jan-9

6

Ja

n-9

8

Jan-0

0

Jan-0

2

Jan-0

4

Jan-0

6

Jan-0

8

Jan-1

0

Jan-1

2

Jan-1

4

Jan-1

6

S&P U.S. Treasury Bond Index Weighted Yield to Maturity

3 Year Subsequent Index Total Return

Yield and Forward Return in U.S. Treasuries

12

?

Source: S&P Dow Jones Indices LLC. Data as of June 30, 2017. Index performance based on total return in U.S. dollars. Charts and graphs are provided for illustrative purposes. Past performance is not an indication of future results. These charts and graphs may reflect hypothetical historical performance. Please see the Performance Disclosure at the end of this document for more information regarding the inherent limitations associated with back-tested performance.


0%

1%

2%

3%

4%

5%

6%

0 1 2 3 4 5 6 7 8 9 10

Yie

ld-t

o-W

ors

t

Modified Duration

Selected Bond Indices – Yield & Duration

13

S&P/ASX Bank

Bill Index

S&P/ASX Australian

Fixed Interest

S&P/ASX Corporate Bond

S&P Pan Asia

Sovereign Bond

S&P Eurozone

Investment Grade

S&P/ASX Government

10 - 15 Yr Bond

S&P International

Corporate Bond

S&P/ASX Government Bond

S&P Pan Asia

Corporate Bond

Source: S&P Dow Jones Indices LLC. Data as of June 30, 2017. For illustrative purposes only. Past performance is no guide to future performance.

S&P U.S. Treasury

Bond


Income Beyond Bonds in Australia

14

Source: S&P Dow Jones Indices as of June 30, 2017. For illustrative purposes only.

4.18%

4.56% 4.61%4.74%

5.35%

1.63%

2.39% 2.48%

3.12%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

S&P/ASXBank Bill

S&P/ASXGovernment

Bond

S&P/ASXAustralian

FixedInterest

S&P/ASXCorporate

Bond

S&P/ASX200

S&P GlobalDividend

Aristocrats

S&P/ASXFrankedDividend

S&P/ASXShareholder

Yield

S&P/ASXDividend

OpportunitiesIndex

Equity (indicated dividend yield)

Fixed Income (weighted yield-to-worst)


Risk Management in Dividend Indices

15

• Trailing (or estimated) dividends can be misleading if a company’s prospects have worsened materially in the quite recent past.

• For an investor, companies that pay high dividends are only attractive if the dividend-payer can afford them.

• Dividend-related equity indices can apply risk management filters and only select stocks that satisfy certain additional criteria.

• The particular filters chosen can vary across indices (and geographies) but each aims to mitigate the potential pitfalls of dividend investing.


Dividend Index – Methodology Highlights

16

SummarySelected Filters

(at rebalance)

S&P/ASX Franked

Dividend Index

30 largest companies in the S&P/ASX

200 that have paid out 100% franked

dividends in the past two years.

* Non-negative 12-month trailing earnings

* Stable or increasing three-year dividend growth

S&P/ASX 300

Shareholder Yield

Index

The 40 stocks of the S&P/ASX 300 with

the highest shareholder yield.

* Free cash flow > common dividends plus buybacks

* Non-negative dividends (1Yr)

* Non-negative dividend growth (1Yr)

S&P/ASX Dividend

Opportunities Index

50 higher-yielding companies from the

S&P/ASX 300

* Excludes the lowest 10% by momentum

* Stable or increasing three-year dividend growth

S&P Global

Dividend

Aristocrats

Highest yielding global companies that

have followed a policy of increasing or

maintaining dividends.

* Increased or maintained dividends for 10 years

* Positive earnings, and payout ratio <100%

* Not more than 10% indicated dividend yield

Source: S&P Dow Jones Indices as of June 30, 2017. Table provided for illustrative purposes only. The full methodology for each index is available at www.spdji.com


http://www.spdji.com/

50

100

150

200

250

300

350

Dec 0

4

De

c 0

5

Dec 0

6

Dec 0

7

Dec 0

8

Dec 0

9

Dec 1

0

Dec 1

1

Dec 1

2

Dec 1

3

Dec 1

4

Dec 1

5

Dec 1

6

S&P/ASX 300 Shareholder Yield Index TR

S&P/ASX 200 TR

S&P Global Dividend Aristocrats TR AUD

S&P/ASX Franked Dividend Index TR

S&P/ASX Dividend Opportunities TR

Australian Dividend Index Performance

17

*Data has been re-based at 100

Source: S&P Dow Jones Indices LLC. Data as of June 30, 2017. Index performance based on total return in AUD. Charts and graphs are provided for illustrative purposes. Past performance is not an indication or guarantee of future results. These charts and graphs may reflect hypothetical historical performance. Please see the Performance Disclosure at the end of this document for more information regarding the inherent limitations associated with back-tested performance.


Performance and Risk Statistics

18

Total Return (Ann.) 1 Year 5 Years 10 Years Since Dec 2004

S&P/ASX 300 Shareholder Yield 23.8% 15.6% 6.5% 9.7%

S&P/ASX 200 14.1% 11.8% 3.6% 7.4%

S&P Global Dividend Aristocrats 10.0% 16.6% 3.9% 7.1%

S&P/ASX Franked Dividend -0.4% 6.9% 3.4% 7.1%

S&P/ASX Dividend Opportunities 14.9% 7.4% 2.4% 5.5%

Compounded Dividend Return (Ann.) 1 Year 5 Years (Ann) 10 Years (Ann) Since Dec 2004

S&P/ASX 300 Shareholder Yield 5.5% 5.7% 5.5% 5.6%

S&P/ASX 200 4.8% 4.9% 4.5% 4.6%

S&P Global Dividend Aristocrats 4.8% 5.3% 4.8% 4.8%

S&P/ASX Franked Dividend 4.4% 5.0% 4.9% 4.9%

S&P/ASX Dividend Opportunities 5.8% 5.4% 5.3% 5.3%

Risk Metrics Max DD Volatility (10Yr) Return/Risk (10Yr) Current P/E

S&P/ASX 300 Shareholder Yield -48.5% 15.1% 0.43 12.58

S&P/ASX 200 -47.2% 14.3% 0.25 18.63

S&P Global Dividend Aristocrats -53.8% 13.6% 0.29 15.86

S&P/ASX Franked Dividend -39.6% 14.2% 0.24 16.53

S&P/ASX Dividend Opportunities -49.6% 16.1% 0.15 17.10

Source: S&P Dow Jones Indices LLC. Data as of June 30, 2017. “Max DD” refers to maximum peak-to-trough decline in the index level, measured monthly. “Current P/E” based on trailing 12-month earnings. Index performance based on total return in AUD. Charts and graphs are provided for illustrative purposes. Past performance is not an indication or guarantee of future results. These charts and graphs may reflect hypothetical historical performance. Please see the Performance Disclosure at the end of this document for more information regarding the inherent limitations associated with back-tested performance.


0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Ja

n-1

0

Jan-1

1

Jan-1

2

Jan-1

3

Jan-1

4

Jan-1

5

Jan-1

6

Jan-1

7

12M

Tra

ilin

g D

ivid

en

d Y

ield

S&P/ASX 200 (4.29%)

S&P/NZX 50 (4.01%)

S&P Europe 350 (3.46%)

S&P Global 1200 (2.56%)

S&P/TOPIX 150 (2.27%)

S&P 500 (2.12%)

Benchmark Equity Yields Over Time

19

Source: S&P Dow Jones Indices LLC. Data as of June 30, 2017. For illustrative purposes only. Past performance is no guide to future performance

Trailing Yield

as of 30 June 2017


“Investors should remember that their scorecard is not computed using Olympic-diving methods: Degree-of-difficultydoesn’t count.”

Warren Buffet, Chairperson’s Letter 1994

20


Performance Disclosure

The launch date of the S&P U.S. Treasury Bond Index was March 24, 2010. The launch date of the S&P/ASX Franked Dividend Index was February 29, 2016. The launch date of the S&P/ASX 200 was April 3, 2000. The launch date of the S&P/ASX 300 Shareholder Yield Index was December 19, 2014. The launch date of the S&P Global Dividend Aristocrats AUD was July 15, 2013. The launch date of the S&P/ASX Dividend Opportunities Index was September 21, 2010.

All information presented prior to an index’s Launch Date is hypothetical (back-tested), not actual performance. The back-test calculations are based on the same methodology that was in effect on the index Launch Date. Complete index methodology details are available at www.spdji.com.

S&P Dow Jones Indices defines various dates to assist our clients in providing transparency. The First Value Date is the first day for which there is a calculated value (either live or back-tested) for a given index. The Base Date is the date at which the Index is set at a fixed value for calculation purposes. The Launch Date designates the date upon which the values of an index are first considered live: index values provided for any date or time period prior to the index’s Launch Date are considered back-tested. S&P Dow Jones Indices defines the Launch Date as the date by which the values of an index are known to have been released to the public, for example via the company’s public website or its datafeed to external parties. For Dow Jones-branded indices introduced prior to May 31, 2013, the Launch Date (which prior to May 31, 2013, was termed “Date of introduction”) is set at a date upon which no further changes were permitted to be made to the index methodology, but that may have been prior to the Index’s public release date.

Past performance of the Index is not an indication of future results. Prospective application of the methodology used to construct the Index may not result in performance commensurate with the back-test returns shown. The back-test period does not necessarily correspond to the entire available history of the Index. Please refer to the methodology paper for the Index, available at www.spdji.com for more details about the index, including the manner in which it is rebalanced, the timing of such rebalancing, criteria for additions and deletions, as well as all index calculations.

Another limitation of using back-tested information is that the back-tested calculation is generally prepared with the benefit of hindsight. Backtested information reflects the application of the index methodology and selection of index constituents in hindsight. No hypothetical record can completely account for the impact of financial risk in actual trading. For example, there are numerous factors related to the equities, fixed income, or commodities markets in general which cannot be, and have not been accounted for in the preparation of the index information set forth, all of which can affect actual performance.

The Index returns shown do not represent the results of actual trading of investable assets/securities. S&P Dow Jones Indices LLC maintains the Index and calculates the Index levels and performance shown or discussed, but does not manage actual assets. Index returns do not reflect payment of any sales charges or fees an investor may pay to purchase the securities underlying the Index or investment funds that are intended to track the performance of the Index. The imposition of these fees and charges would cause actual and back-tested performance of the securities/fund to be lower than the Index performance shown. As a simple example, if an index returned 10% on a US $100,000 investment for a 12-month period (or US $10,000) and an actual asset-based fee of 1.5% was imposed at the end of the period on the investment plus accrued interest (or US $1,650), the net return would be 8.35% (or US $8,350) for the year. Over a three year period, an annual 1.5% fee taken at year end with an assumed 10% return per year would result in a cumulative gross return of 33.10%, a total fee of US $5,375, and a cumulative net return of 27.2% (or US $27,200).

21


General Disclaimer

Copyright © 2017 by S&P Dow Jones Indices LLC, a part of S&P Global. All rights reserved. Standard & Poor’s ®, S&P 500 ® and S&P ® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of S&P Global. Dow Jones ® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). Trademarks have been licensed to S&P Dow Jones Indices LLC. Redistribution, reproduction and/or photocopying in whole or in part are prohibited without written permission. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates (collectively “S&P Dow Jones Indices”) do not have the necessary licenses. All information provided by S&P Dow Jones Indices is impersonal and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. Past performance of an index is not a guarantee of future results.

It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. S&P Dow Jones Indices makes no assurance that investment products based on the index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor, and S&P Dow Jones Indices makes no representation regarding the advisability of investing in any such investment fund or other investment vehicle. A decision to invest in any such investment fund or other investment vehicle should not be made in reliance on any of the statements set forth in this document. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other vehicle. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.

These materials have been prepared solely for informational purposes based upon information generally available to the public and from sources believed to be reliable. No content contained in these materials (including index data, ratings, credit-related analyses and data, research, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of S&P Dow Jones Indices. The Content shall not be used for any unlawful or unauthorized purposes. S&P Dow Jones Indices and its third-party data providers and licensors (collectively “S&P Dow Jones Indices Parties”) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Dow Jones Indices Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content. THE CONTENT IS PROVIDED ON AN “AS IS” BASIS. S&P DOW JONES INDICES PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Dow Jones Indices Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages.

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In addition, S&P Dow Jones Indices provides a wide range of services to, or relating to, many organizations, including issuers of securities, investment advisers, broker-dealers, investment banks, other financial institutions and financial intermediaries, and accordingly may receive fees or other economic benefits from those organizations, including organizations whose securities or services they may recommend, rate, include in model portfolios, evaluate or otherwise address.

22


Building income portfolios with ETFs

Dhruv Nagrath, iShares Product Strategist

BlackRock

FOR WHOLESALE CLIENT USE ONLY – NOT FOR DISTRIBUTION TO RETAIL CLIENTS

27 July 2017

79 109 146 218 319 428598

851 772

1143

14511494

1908

2363

27492961

3505

4110

0

1,000

2,000

3,000

4,000

5,000

(US$bn)

Using ETFs for income

24

Data are as of 30 June 2017. Global ETP flows and assets are sourced from Markit and BlackRock. Flows and assets for the years between 2010 and 2015 are sourced from

Bloomberg and BlackRock. Flows and assets for years prior to 2010 are sourced from Strategic Insights Simfund. Asset classifications are assigned by BlackRock based on product

definitions from provider websites and product prospectuses. Other static product information is obtained from provider websites, product prospectuses, provider press releases, and

provider surveys.

Commodities & othersFixed income

Equity

Global ETP AssetsTwo great investment ideas combined

DiversifiedTradable

during the

day

Diversified

funds that

trade like

stocks

ETFs

Stock

Like a

Mutual

Fund

ETFs have made it easier for investors to access securities markets in Australia and around the

world. Fixed income ETF assets are growing as investors hunt for yield and seek diversification.


ASX-listed ETFs: an increasingly broad income toolkit

25

Investors seeking income on the ASX can use ETFs with equity dividend, fixed income and cash

exposures.

Source: ASX, as at 30 June 2017. Equity dividend category does not include products which have been classified by the ASX as ‘Managed Funds’.


ASX listed ETPs

162 ETPs, A$29.2bn

Equity Dividend

$1.8bn

Australia7 ETFs

Global2 ETFs

Fixed Income

$3.2bn

Australia13 ETFs

Global5 ETFs

AUD Cash4 ETFs

Other exposures

Balancing yield and risk

26FOR WHOLESALE CLIENT USE ONLY – NOT FOR DISTRIBUTION TO RETAIL CLIENTS

Case study provided for illustrative purposes only. This is not a recommendation to invest in any particular financial product. No analysis of their suitability was conducted and no

statement of opinion in relation to their suitability is provided. Past performance is not a reliable indicator of future performance

Case Study: a financial adviser’s portfolio was centred around Australian hybrid securities but

lacked exposure to international sources of fixed income. They were able to use ETFs to seek that

international fixed income exposure in a risk-controlled manner.

Starting Portfolio Completed Portfolio

ANZPE, 33.33%

CBAPC, 33.33%

WCTPA, 33.33%

ANZPE, 16.50%

CBAPC, 16.50%

WCTPA, 16.50%

Global High Yield Bond

ETF, 16.83%

Global Investment

Grade Corporate Bond ETF,

16.83%

Global Emerging

Market Bond ETF, 16.83%

Balancing yield and risk


Source: BlackRock, May 2016. Analysis based on total returns between 1 April 2014 (the month of inception of the ANZ security) and 31 December 2015. Net coupons of hybrid securities

reinvested for fair comparison with fixed income funds. Index returns used for IHHY, IHCB and IHEB due to the funds only being listed on 9 December 2015. Case study provided for

illustrative purposes only. This is not a recommendation to invest in any particular financial product. No analysis of their suitability was conducted and no statement of opinion in relation to

their suitability is provided. Past performance is not a reliable indicator of future performance.

Not only did the new portfolio diversify internationally, it showed that it was possible to

significantly reduce risk while maintaining yield and total return.

Similar yield and return, but one third less risk Growth of $100

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Portfolio Gross Yield2015

Annualised Return Annualised StandardDeviation


$96

$98

$100

$102

$104

$106

$108

Apr-

2014

May-2

014

Jun-2

014

Jul-2014

Aug-2

014

Sep-2

014

Oct-

2014

Nov-2

014

Dec-2

014

Jan-2

015

Feb-2

015

Mar-

2015

Apr-

2015

May-2

015

Jun-2

015

Jul-2015

Aug-2

015

Sep-2

015

Oct-

2015

Nov-2

015

Dec-2

015


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receipt of this material that they are a wholesale client as defined under the Corporations Act 2001 (Cth). This material is intended only for wholesale clients and must

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domiciled iShares ETFs. BIMAL is the local agent and intermediary for non-Australian domiciled iShares ETFs referred to in this material that are quoted on ASX and

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Any potential investor should consider the latest product disclosure statement, prospectus or other offer document (Offer Documents) before deciding whether to

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An iShares ETF is not sponsored, endorsed, issued, sold or promoted by the provider of the index which a particular iShares ETF seeks to track. No index provider

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Important Information


S&P: Riding the Wave

27th July 2017

30

GENERAL ADVICE WARNING:The advice may not be suitable to you because it contains general advice which

does not take into consideration any of your personal circumstances. All strategies

and information provided within this presentation is general advice only

Nathan Scott Ide (Authorised Representative Number 1239544) and Private Capital Management Pty Ltd (Corporate Authorised Representative

Number 1239545) are Authorised Representatives of Dover Financial Advisers AFSL 307248

Presentation Summary

• Case Study: Client Background

• Case Study: Share Portfolio

• Case Study: ETF Income Portfolio

• The ETF Checklist

31


Case Study: Client Background

• Moderately conservative couple late 50s

• Combined SMSF Balance of $3mn (close to balance cap)

• Required liability matching for investment portfolio

• Clients mindful of market volatility and preservation of capital

32

SMSF Trustees Liability Matching VolatilityFor Financial Professionals Only

33

Case Study: Share Portfolio

Share Portfolio

CBA WBC ANZ WES NAB

Annualised Return*:

6.09%

Information Ratio*:

0.38%

Annualised Risk*:

15.90%

Yield*:

5.69%

*Source: Bloomberg, MPI, Jan 2016 to Jul 2017For Financial Professionals Only

34

Case Study: ETF Income Portfolio

ETF ModelAnnualised Return*:

8.05%

Information Ratio*:

1.6%

Annualised Risk*:

5.30%

Yield*:

4.24%

Yield-focussed Well diversified portfolio Reduction in volatility

*Source: Bloomberg, MPI, Jan 2016 to Jul 2017 For Financial Professionals Only

The ETF Checklist

35

ETFs have redefined how advisors manage clients money and is why we continue to replace traditional money

management tools with passive ETFs

Cost effective (advisors alpha)

Transact direct or via platform

Tax efficiency and liquidity

Ability to use passive tools actively

Client expectations

Pivot in-and-out of exposures


Our Details

• Private Capital Management Website: www.private-capital.com.au

• Address: Level 26, 1 Bligh Street, SYDNEY, NSW, 2000

• Phone: 1800 896 411. Mobile: 0404 225 381

• Private Capital Management Pty Ltd ABN: 53 605 904 309

36For Financial Professionals Only

http://www.private-capital.com.au/


Riding the Wave of Rising Rates Without Sacrificing Yield

Copyright © 2017 by S&P Global. All rights

reserved.

Discussion and Q&A

Stuart MagrathS&P Dow Jones Indices

Tim EdwardsS&P Dow Jones Indices

Dhruv NagrathBlackRock

Webinar

Thursday, July 27, 2017

Nathan S. IdePrivate Capital Management



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Tim Edwards


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BlackRock

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Private Capital Management

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