Viewpoint - ClearView

Viewpoint Edition 1, 2016 1

A new year with new opportunitiesIt is a pleasure to wish you a happy new year and we hope it is one filled with new opportunities for you. As always, we will be looking to partner with you to get the most out of life with financial advice that is focused on your lifestyle and what is important to you.

In this edition, our article on how financial needs can change through various stages of life is a timely reminder of just how important it is to align your financial planning with the needs and opportunities that emerge through life’s twists and turns. Getting the right advice along the way can make a world of difference.

Quality advice is never more important than when it applies to your financial security and our story on the importance of ‘guaranteed renewability’ on your personal insurance underscores the need not to take anything for granted. It’s essential reading if you are concerned about protecting what really matters.

Aged care is an increasingly important issue for elderly relatives and for ourselves. Our birds-eye view in this edition of the costs and rules surrounding aged care accommodation is a great starting point for exploring this complex area – it is never too early to start.

ViewpointAdvice. Life. Investments. Superannuation and Retirement. Edition 1, 2016

Simon SwansonMANAGING DIRECTOR

This newsletter is intended to provide factual and general information only. The information has been prepared without taking into account any particular person’s objectives, financial situation or needs. Before acting on such information, you should consider the appropriateness of the information having regard to your personal objectives, financial situation or needs. ClearView recommends that you obtain personal financial advice and read the relevant Product Disclosure Statement before making any decision about a product. This information does not in any way constitute tax or legal advice and before relying on this information, you should seek independent expert advice. While we have taken all care to ensure the information in this newsletter is accurate and reliable, to the extent the law permits we will not assume liability to any person for any error or omission in the newsletter however caused.

Life changing checkpoints

Continued page 2

Few things in life are ever constant. The ebb and flow of events and experiences will constantly change, as will our desires and objectives. What we value and pursue in our youth is very different to what has priority in our later years. Our financial planning therefore must constantly adapt and adjust to key life changes.

Planning proactively vs responding reactivelyWhile no two people will ever have exactly the same life experience, there are key markers and events in life that are generally common to all of us. Our relationships, employment, purchases and pastimes are all unique to each of us, but all have a common thread. These events can have a profound effect on our priorities and on our financial situation, but our financial success depends greatly on whether we choose to plan proactively around these life events or simply allow them to happen and ‘take your chances’.

2 Viewpoint Edition 1, 2016

Financial Advice

Continued from page 1

Let’s take a birds-eye view of what some of these key events and life stages are and how we can respond to them in our financial planning.

Finding our feet in the early yearsNo one ever forgets the surge of independence they get from their first pay packet, the thrill of moving out of home for the first time, or the excitement of committing to a relationship with a life partner. Our twenties and thirties are a succession of milestone events like this that have huge impacts on our lifestyle and our financial situation.

Before long you might start a family and take the leap into mortgage hood. Simultaneous to that, you may be climbing the corporate ladder, or perhaps stepping out into your own business. The challenges, possibilities and opportunities come thick and fast.

So how do your finances cope through all these changes? What decisions can you make in these formative years that will impact on your financial success and security for the rest of your life? A wise person once said that those who spend before they save will always end up working for the people who save before they spend. This may sound simplistic, but the principle it illustrates is clear; it is critical to make conscious, informed and thoughtful decisions about your finances during these years in order to set yourself up for a lifetime.

Establishing a good savings habit is a starting point and this needs to be coupled with well controlled use of debt, so that you are living within your means. Beyond this, however, it is important to develop a serious attitude to investing to grow your net worth, acquiring of assets and the protection of lifestyle through personal insurance. Taking advantage of superannuation’s tax efficiencies and long term savings potential is also paramount, in order to get the power of compound interest working for you.

Building on an established baseAs you move to middle age, there are many events that will continue to impact your financial health and direction. Your income may well be increasing, or there may be new career opportunities presenting themselves. At the same time, your expenses may be increasing through additions to the family and the burden of education costs will be growing. You may need to upgrade the size of your residence and expand your mortgage too.

All these events will require deliberate and decisive actions in your financial planning. Budgeting becomes more important as your commitments grow. Your personal insurance must be continually reviewed to reflect the burgeoning financial responsibility that a family and a mortgage place on you. On the growth side, your savings habits need to continue and your investments and super need to gain increasing sophistication and diversity to ensure you are maximising wealth accumulation.

Making the most of new opportunitiesAs we move deeper into middle age and start to see the allure of retirement in the distance, there will eventually come a point where expenses and income will peak, plateau and start to taper off. This will vary in timing from person to person, but key events such as children maturing and leaving home and the paying off of a mortgage can present golden opportunities to accelerate your financial position, if you are diligent with your financial planning.

As your discretionary income increases in later middle age it is easy to fritter it away in casual spending, but by keeping your eye on the financial planning ball you can really set yourself up for retirement. Your investment portfolio can be boosted and further diversified and your superannuation can be given a shot in the arm to maximise tax benefits.

In the last five years leading up to retirement you can also start to access strategies, such as transition to retirement, which will maximise tax benefits and either accelerate your overall growth or allow you to scale down work commitments more quickly.

Your personal insurance still requires attention, even though liabilities are contracting. This means managing the reduction of insurance in a measured way to avoid exposure to the increasing financial risk of illness.

Retiring in styleOnce you finally take the plunge into retirement your financial planning must continue to be objectively focused so that you can set yourself up for a worry free future. This needs to involve the careful selection of investment assets and income stream plans, together with maximising social security benefits.

Critical to whatever investment decisions you make is a close consideration of what lifestyle and activities you want to enjoy in retirement, so that your investments serve a specific purpose, rather than being managed adhoc.

Why advice is so importantEven from this quick summary it is easy to see how challenging it can be to try and manage all of the financial decisions you need to make throughout your life. That is where a ClearView financial adviser can be so integral to the process. They can offer objective and informed guidance through all stages to ensure your financial strategy is well matched to your life goals and robust enough to withstand all of life’s twists and turns. It pays to have qualified, professional advice on your side every step of the way.

Talk to a ClearView financial adviser today to explore the possibilities for your future. Call us on 132 977.


What’s News?

CybercrimeCybercrime is an issue which continues to impact the lives of many Australians. It involves the use of internet and digital technology platforms to execute fraudulent IT intrusions, obtain unauthorised access to information, perform identity theft and, steal money.

Due to the ever changing technological environment, cybercriminals continue to evolve and are often sophisticated networks with powerful tools and techniques to facilitate their attacks. As a result, there is an increased and continually growing risk that vulnerabilities in technology, processes and people, may be exploited by cybercriminals in an attempt to execute fraud.

Indeed, for the year ending 31 December 2015, the Australian Competition and Consumer Commission (ACCC) received circa 95,000 reports of scams from Australian consumers with over 84 percent of these attacks being delivered by the internet, email, web applications, telephone, text messages and social

media. Of those targeted, the highest proportion of consumers who fell victim were individuals aged 45 and above.

Given this increased risk and growing threat, the best tool is prevention so, if at any time you suspect you are falling victim to a cybercriminal or fraudster, please inform your financial adviser immediately and cease all communication with the suspect. Source: https://www.scamwatch.gov.au/types-of-scams

Privacy update Recently we re-published our Information Handling Policy to make it clearer about the way we collect and share information with third parties.

In some situations, we may also be required to collect personal information from you about someone else, for instance when you have nominated your spouse, partner, child or another person as your beneficiary. We have also made some changes to how we may share this information.

As a result of this policy update, we have changed some of our processes, declaration forms and letters. You may start to notice these subtle changes.

If you would like to know more about privacy and personal information, including:

• Why we collect it• Who we may share it with• How to access it and correct it• How to get in touch with if you have any concerns

You can access the current Information Handling Policy from our website at www.clearview.com.au or by contacting ClearView on 1800 265 744.

Handy tip - ensure you always keep your personal details updated to avoid your funds becoming unclaimed super money. You can do this simply by speaking to your adviser, calling us on 132 977, sending us a letter or emailing [email protected].

Changes to unclaimed super moneyThe Government recently amended the unclaimed super money laws to increase the existing lost account threshold.

The previous threshold for lost superannuation to be transferred to the Australian Taxation Office (ATO) was $2,000. However this changed in December 2015 when the limit was increased to $4,000. The limit is expected to change again on 31 Dec 2016 to $6,000.

We’ll always try to contact and locate our members before deeming them as lost however if unsuccessful we’re required under Super laws to transfer these accounts to the ATO.


2016 has seen the worst start to a year in financial markets history.

We went into the New Year with the ClearView funds positioned defensively. We are overweight more defensive investments, such as bonds and cash; and within the growth portion of portfolios we favour the more defensive end of stock markets, such as infrastructure companies.

So we are hardly raging bulls; but we also don’t think this is the start of the next Global Financial Crisis (GFC) à la 2008. Let’s explain why.

What has happened? As in the last bout of volatility, in August last year, equity markets have sold off around the world led by Chinese shares. The Shanghai stock market (the main share market in China) has lost near to a quarter of its value in just the first month of the year. MSCI World (a broad index of developed market shares) and Australian shares are down by 6%.

Oil took another leg down, tumbling 30% at one point to below 30 US dollars a barrel.

Finally, the Renminbi (the Chinese currency), has again been allowed to depreciate by the Chinese authorities without explanation and taking markets by surprise (this was also one of the triggers for the market gyrations in August last year).

These three factors have combined to take a sledge hammer to investor sentiment. There are fears that the Chinese government is losing control as the economy spirals into recession, which in turn would then bring the rest of the world down with it.

The larger issues at play

ChinaChina is attempting to transition from an economic model driven by investment (i.e. building apartments, bridges, roads, etc.) and exports to one with more of a role for domestic consumption and services; and with more of a role for financial markets. This transition is just getting underway and is not something that will happen overnight. It is likely to be a dominant theme for investors for the next decade. This necessarily involves headline growth for China coming down to a still very respectable 3-4% rather than the double digits growth of old. This is not new news.

The global economy isn’t in dire straightsLeading economic indicators such as Purchasing Manager Indices (PMIs) are still in reasonable shape. The big exception to

this is the US manufacturing PMI is now below 50, the dividing line between recession and expansion, as the high US dollar takes its toll on US exporters. However, services are still holding up, and this is what makes up 80% of the US economy. The US labour market is in rude good health. Europe continues to recover, albeit from a low base.

OilUS shale oil and the ending of sanctions against Iran has led to oversupply and the effective breakdown of the OPEC cartel’s ability to influence the oil price

However, a fall in the oil price is effectively a transfer of wealth from contributors to the global savings glut, i.e. the Gulf States, to developed market consumers. And it is a persistent lack of aggregate demand (i.e. people buying things) that has continually held back the world economy post GFC. So a fall in the oil price is net/net a good thing; not something to trigger worries of global recession. The pain for oil producers and associated oil services companies is felt first however. US consumers have not yet started spending the extra money they now have in their pockets and are instead saving it.

Don’t sell everythingWe’re not going to sugar-coat things: we are late in the cycle and the bull market is getting pretty long in the tooth (if not straight out over). That doesn’t mean however that investors should now hit the panic button and switch into 100% cash. Timing markets requires getting not just the time to sell right; but also the time to buy. Very difficult to do in practice.

Valuations had run ahead of fundamentals. There are now more opportunities for good stock pickers to buy solid companies with good prospects of growing revenues at a more reasonable price. We believe we have some very good stock pickers in the form of the fund managers we have selected as “best of breed” in each asset class used in the ClearView funds.

This is the time to stick to a disciplined approach, look through the market noise, and maintain a diversified portfolio across asset classes.

Justin McLaughlin

CLEARVIEW CHIEF INVESTMENT OFFICER

It’s not the end of the world just yet

Market Update

Talk to your ClearView financial adviser today to see how the current market may affect you.


Market Update


Australia’s ageing population combined with improving longevity rates has brought the issue of aged care into the limelight in recent years. Despite this, there is still a good deal of mystery surrounding the rules and costs involved in the aged care system. This summary provided here may be a good starting point for those who may need to negotiate the system now or are planning ahead for the future.

How does someone access an aged care facility?Access to an aged care facility or other aged care services is controlled on a needs basis through an independent assessment system. Once a person’s health is such that they may have trouble living independently or have difficulty with everyday tasks, they can request an assessment by a local Aged Care Assessment Team (ACAT, or ACAS in Victoria).

A member of the ACAT (usually a nurse, social worker or other health care professional) will visit to discuss how well the person is managing with day-to-day life. They may also ask to speak to the person’s doctor. The outcome of this assessment will determine whether the person is eligible for subsidised aged care services and if they qualify for entry to an aged care facility.

Selecting an aged care facilityOnce a person qualifies for entry to an aged care facility it is then up to the person and their family to visit and select an aged care home that suits them. This may require inspecting various facilities and asking questions about the care and services offered and their cost structure. You can visit myagedcare.gov.au to search for possible aged care homes in your vicinity. This site also provides details to enable comparison of costs and services.

Once you have narrowed down the options it is advisable to make an application for entry at more than one facility, as availability can sometimes be an issue. Once a home offers a position, the person is given a Resident Agreement covering things like services, fees, rights and responsibilities. It is vital that the person understands this document and gets professional advice on any issues of concern before they sign.

What does it cost? The costs of residential aged care are substantial, but government subsidies ensure that access is available to all. The amount you need to contribute toward the cost of care will depend on your financial situation and is assessed via an income and assets test.

The costs for an aged care facility are broken down into the following types of fees:

An accommodation payment: This is for your accommodation in the home. Each aged care facility is required to publish its accommodation charge and this amount may be fully or partly subsidised, depending on your means testing. You can choose to pay your accommodation costs by a lump-sum, rental-type payments, or a combination of both. Lump-sum payments are refundable once the person leaves or passes on.

A basic daily fee: This covers living costs such as meals, power and laundry.

A means-tested care fee: This is an additional contribution towards the cost of care that some people may be required to pay, depending on the assessment of income and assets. Annual and lifetime caps apply to limit the amount of the means-tested care fee you will need to pay.

Optional extra fees: Some homes will offer additional optional services for an additional cost.

The importance of obtaining good adviceWhile this summary provides the basics on how the system works, the complexities involved means that it is important to get informed advice about how to best navigate your way through it all. A ClearView financial adviser has the experience and knowledge to help guide you and your family members at a time when emotions may be running high and confusion may interfere with good decision making.

Good advice can help address critical questions, such as:

• How to best fund the accommodation cost.

• What to do with the family home to achieve the best financial outcome.

• How to best preserve social security benefits.

• How to structure investments to optimise your means test situation and properly provide for ongoing income.

• What to do to ensure the person’s estate is protected for the benefit of beneficiaries

Even if the need for aged care is not imminent, it makes good sense to consider the issues in advance in order to relieve stress when the time comes to take action.

Aged Care

Demystifying the aged care maze


Aged Care

Talk to your ClearView financial adviser to help you make an informed decision or call us on 132 977.


Life Insurance

These days the word ‘guarantee’ is often flaunted about frivolously. It’s a mandatory inclusion on T.V. infomercials and ‘guaranteed or your money back’ is pervasive on the products we see on our supermarket shelves. When the product in question is a mass-produced consumer item, a guarantee is hardly a huge risk for the marketer. In the case of personal insurance however, it takes on a whole new level of significance.

The two most important words in personal insuranceThe diversity in personal insurance products has exploded in the last two or three decades. There are a host of products out there with a bewildering array of added benefits, optional extras, special discounts and increasingly generous definitions. All of that diversity however, makes very little difference if the policy you are looking at does not contain two critical words; guaranteed renewable.

In essence, when the words ‘guaranteed renewable’ are included on a life, income protection or disability insurance policy, it means that the insurer is making a binding commitment of enormous

proportions. Considering that the consequence may end up leading to the payment of hundreds of thousands of dollars in lump sum benefits or thousands of dollars a month in income protection benefits, it is not something that either the insurer or the customer should take lightly.

What does it actually mean?When a policy includes the words ‘guaranteed renewable’, it effectively means that the insurer is bound to keep the insurance cover in place until the customer chooses to stop it or until the policy expiry (for example, at a pre-determined age), whichever comes first.

If the customer has a change of employment, deterioration in health or takes up a high risk recreational activity after the policy is put in place, it has no effect on the cover. The insurer cannot alter the terms of the insurance cover or cancel the policy as a result of such changes in circumstances. The cover is locked in until the customer chooses otherwise. The only obligation on the customer’s part is that they keep their premium payments up to date.

A commitment not taken lightly Some people may perceive that obtaining life or disability insurance involves an excessive amount of disclosure, with questions about personal health and habits, details of family history and even the need for doctor’s reports or medicals. While this may seem inconvenient at the time, it is important to look at the need for such information in the context of the responsibility and commitment the insurer is taking on.

If they are going to offer cover with a guarantee that they must keep it in place no matter what, then it sheds some new light on why they need to have all the necessary information to assess and underwrite the cover at the outset. Insurers only have one opportunity to get their decision right before they take on an obligation of such magnitude.

Don’t be caught with substandard coverThe importance of making sure your personal insurance is guaranteed renewable cannot be overstated. No matter what ‘bells and whistles’ a policy may have, they cannot make up for the fundamental need to have cover that has the inbuilt foundation of guaranteed renewability.

One guarantee you should always insist on

If you have any questions about your insurance plans, contact your ClearView financial adviser to review your situation.


Lifestyle

Enjoy the benefits of volunteering

Retirement is typically portrayed as a time to put your feet up and enjoy your favourite recreational activities. While the opportunity to do those things is well earned, many people will still have a need or desire to keep their minds and talents engaged in something productive, stimulating and connected with others. Some may find this through continuing in part time work, but many others discover real fulfilment through joining the immensely popular volunteering movement.

More than a quarter of the population are involved in volunteering to some degree, which is a powerful testament to the contribution that can be made to the community as well as the personal satisfaction to be gained.

A multitude of optionsThe opportunities to use your time, talents and labour can be found in a vast variety of situations and organisations. As a starting point, consider the many institutions in your local area, such as schools, community centres, charitable organisations, aged care institutions, hospitals and churches. They all hold boundless opportunities for willing helpers to apply their hands, hearts and minds in stimulating activities that can make a real difference. Beyond these places, you can combine the benefits of volunteering with your desire for travel through many overseas opportunities.

A win-win situationIt is not just a sense of altruism that attracts people to volunteering. Many discover a genuine sense of purpose and an opportunity to be mentally and physically engaged. In many ways it is an ideal way for retirees to redirect their energies and focus, after a lifetime of

employment has suddenly come to an end. It provides an outlet for social connection and a chance to broaden your focus outside of your own personal world.

Something for everyoneTo find a volunteering need that best meets your abilities and interests, the best place to start is to consider what talents, skills and experience you have built up over your years of work or raising a family. It is also important to consider the types of causes or needs that you feel personally drawn to. Once you have considered what you have to offer you can then seek out possibilities that may suit you.

A great starting point to locate opportunities is the Volunteering Australia organisation. They list thousands of positions on their website www.govolunteer.com.au. This site provides a search facility based on location, causes, types and events, so that you can easily match a position to your profile.

Why not make volunteering an integral part of your retirement planning and discover how it can open your horizons to a more fulfilling lifestyle.


Performance Tables

Your investment optionsA look at how your investment options have recently performed, organised by investment option and identified by product. For more details contact your financial adviser.

ConservativeAsset Allocation (by %) Products Total Performance Returns (% p.a.)

1 year 2 years 3 years 5 years 10 years

CLEARVIEW PENSION PLAN Start date: 1 Feb 02 Unit price: $1.7477 Fund size: $27.14 mill 1.11 3.87 4.00 4.54 3.91

CLEARVIEW MANAGED INVESTMENTS Start date: 16 Jan 02 Unit price: $0.9578 Fund size: $3.02 mill 0.96 3.78 3.93 4.47 3.79

CLEARVIEW SUPERANNUATION AND ROLL-OVERS Start date: 1 Feb 02 Unit price: $1.5477 Fund size: $6.54 mill 0.85 3.43 3.50 3.71 2.86

CautiousAsset Allocation (by %) Products Total Performance Returns (% p.a.)





PrudentAsset Allocation (by %) Products Total Performance Returns (% p.a.)





5%

7%

5%

5%

8.5%

6.5%

25%

5%5%

40%

5%

35%

10%

5%10%

10%

5%

10%

42.5%

30.5%

4% 4%3%

3%3%

10%15%


Performance Tables

Asset Allocation (by %) Products Total Performance Returns (% p.a.)





AssertiveAsset Allocation (by %) Products Total Performance Returns (% p.a.)





International EquitiesAustralian EquitiesListed PropertyInternational Fixed InterestAustralian Fixed InterestListed InfrastructureEmerging MarketsCash and Short Term Securities

Asset AllocationPerformance information as at 31 December2015. Past performance is not an indication of future performance. The value of an investment may rise and fall. ClearView Pension Plan previously known as ClearView Allocated Pension. The asset allocations shown are the target allocations for each fund. Due to market movement and timing of rebalances the actual allocation at any point in time may be up to 2% above or below those displayed.

* Closed to additional/new investments and inward switches.

** Closed to additional/new investments.

^ ClearView Life Assurance Limited guarantees that the price of Guaranteed Cash Units will not fall.

AggressiveAsset Allocation (by %) Products Total Performance Returns (% p.a.)





Guaranteed CashAsset Allocation (by %) Products Total Performance Returns (% p.a.)


CLEARVIEW PENSION PLAN ^ Start date: 24 Jul 95 Unit price: $2.0631 Fund size: $18.84 mill 0.95 1.15 1.30 2.02 3.13

CLEARVIEW SUPERANNUATION AND ROLL-OVERS ^ Start date: 31 Mar 89 Unit price: $3.2826 Fund size: $47.22 mill 0.58 0.75 0.89 1.48 2.50

CLEARVIEW ROLL-OVER BOND **^ Start date: 2 Jul 87 Unit price: $3.7389 Fund size: $2.87 mill 0.57 0.74 0.87 1.47 2.49

15%

5%

25%

12.5%

12.5%

20%

5%

10%

25%

25%

10%

17.5%

100%

17.5%


Performance Tables

Monthly PaymentAsset Allocation (by %) Products Total Performance Returns (% p.a.)


CLEARVIEW MANAGED INVESTMENTS Start date: 24 Jul 95 Unit price: $1.1420 Fund size: $1.43 mill 1.59 4.75 5.33 5.60 4.54

Diversified BalancedAsset Allocation (by %) Products Total Performance Returns (% p.a.)


CLEARVIEW PENSION PLAN * Start date: 5 Aug 97 Unit price: $2.8688 Fund size: $15.65 mill 2.23 5.92 8.38 7.16 4.84


CLEARVIEW SUPERANNUATION AND ROLL-OVERS * Start date: 5 Aug 97 Unit price: $2.3989 Fund size: $30.62 mill 2.11 5.47 7.89 6.19 3.95

CLEARVIEW ROLL-OVER BOND ** Start date: 13 Apr 98 Unit price: $2.3321 Fund size: $1.04 mill 2.11 5.50 7.96 6.18 3.98

Managed GrowthAsset Allocation (by %) Products Total Performance Returns (% p.a.)


CLEARVIEW PENSION PLAN * Start date: 24 Jul 95 Unit price: $3.8732 Fund size: $1.05 mill 2.40 6.10 8.59 7.40 5.09

Managed IncomeAsset Allocation (by %) Products Total Performance Returns (% p.a.)


CLEARVIEW PENSION PLAN * Start date: 24 Jul 95 Unit price: $3.5206 Fund size: $0.49 mill 2.12 5.72 7.07 6.61 5.15

5%

40%

10%

10%

5%5%

50%

5%

5%

25%

5%5%

20%

30%

10%

10%

15%

5%

10%5%

10%

30%

10%

15%

25%

5%

20%

10%


Performance Tables

Performance information as at 31 December 2015. Past performance is not an indication of future performance. The value of an investment may rise and fall. ClearView Pension Plan previously known as ClearView Allocated Pension. The asset allocations shown are the target allocations for each fund. Due to market movement and timing of rebalances the actual allocation at any point in time may be up to 2% above or below those displayed.* Closed to additional/new investments and inward switches. ** Closed to additional/new investments.^ ClearView Life Assurance Limited guarantees that the price of Guaranteed Cash Units will not fall.

Pre-retirementAsset Allocation (by %) Products Total Performance Returns (% p.a.)



Australian Shares GrowthAsset Allocation (by %) Products Total Performance Returns (% p.a.)


CLEARVIEW PENSION PLAN * Start date: 5 Aug 97 Unit price: $4.7679 Fund size: $5.21 mill -1.25 2.15 8.16 7.25 6.11

CLEARVIEW MANAGED INVESTMENTS Start date: 24 Jul 95 Unit price: $0.9029 Fund size: $44.51 mill -3.02 0.44 6.39 5.50 3.94

CLEARVIEW ROLL-OVER BOND ** Start date: 13 Apr 98 Unit price: $3.2227 Fund size: $1.73 mill -1.08 1.76 7.97 6.19 4.54

CLEARVIEW SUPERANNUATION AND ROLL-OVERS * Start date: 5 Aug 97 Unit price: $3.7010 Fund size: $35.55 mill -0.95 2.09 8.17 6.20 4.76

GuaranteedAsset Allocation (by %) Products Total Performance Returns (% p.a.)


CLEARVIEW SAVINGS BOND *^ Start date: 12 Apr 86 Unit price: $3.0557 Fund size: $1.93 mill 0.12 0.23 0.33 0.83 1.67


Asset Allocation

100%

5% 95%

100%


Performance Tables

Performance information as at 31 December 2015. Past performance is not an indication of future performance. The value of an investment may rise and fall. ClearView Pension Plan previously known as ClearView Allocated Pension. The asset allocations shown are the target allocations for each fund. Due to market movement and timing of rebalances the actual allocation at any point in time may be up to 2% above or below those displayed.

* Closed to additional/new investments and inward switches.

** Closed to additional/new investments.

ManagedAsset Allocation (by %) Products Total Performance Returns (% p.a.)


CLEARVIEW SAVINGS BOND * Start date: 12 Apr 86 Unit price: $9.9704 Fund size: $25.27 mill 1.26 3.99 5.71 4.72 3.47

CLEARVIEW SUPERANNUATION AND ROLL-OVERS * Start date: 31 Mar 89 Unit price: $9.1215 Fund size: $28.21 mill 2.60 6.00 8.41 6.71 4.45

CLEARVIEW ROLL-OVER BOND ** Start date: 2 Jul 87 Unit price: $15.3844 Fund size: $36.72 mill 2.84 6.13 8.57 6.75 4.50

Diversified GrowthAsset Allocation (by %) Products Total Performance Returns (% p.a.)



CLEARVIEW MANAGED INVESTMENTS Start date: 1 May 98 Unit price: $0.9337 Fund size: $11.71 mill 2.07 6.71 10.48 8.23 3.83



Diversified StableAsset Allocation (by %) Products Total Performance Returns (% p.a.)






5%

15%

30%

5%


Asset Allocation

5%

5%

15%

40%

5%

10%

25%

10%

15%

5%5%

20%

25%

15%

10%5%

10%

30%

10%

15%

20%


Performance Tables

Investors please note: Past performance is not a basis for assessing future performance. Future performance is not guaranteed by the Responsible Entity, Manager or the Trustee, as applicable. The unit prices used for determining performance calculations are based on exit prices. Performance figures are net of ongoing management fees and applicable government taxes or duties, and do not include entry or exit fees. Performance figures for the ClearView Managed Investments assume the reinvestment of distributions. Unit prices do not take into account any entry or exit fees applicable to the product. Unit prices are dependent on economic conditions, investment management, future taxation and management charges. ClearView Life Assurance Limited, trading as ClearView Life, guarantees that the price of Guaranteed Cash units will not fall. The value of other types of units may rise and fall. ClearView Superannuation and Roll-overs and ClearView Pension Plans are issued by ClearView Life Nominees Pty Limited as Trustee of the ClearView Retirement Plan. ClearView Managed Investments are issued by ClearView Financial Management Limited as the responsible entity. Full details for the above products and their terms and conditions are described in the relevant Product Disclosure Statements (PDS). You should consider the relevant PDS in making a decision whether to buy or continue to hold the product. You can obtain a PDS for a product by calling ClearView on 132 977. The ClearView Savings Bond and ClearView Roll-over Bond are closed to further investment and are issued by ClearView Life Assurance Limited trading as ClearView Life. ClearView Financial Management Limited ABN 99 067 544 549 AFS Licence No. 227677. ClearView Life Nominees Pty Limited ABN 37 003 682 175 AFS Licence No. 227683 RSE Licence No. L0000802. ClearView Life Assurance Limited ABN 12 000 021 581 AFS Licence No. 227682, which also trades as ClearView Life.

Cash and BondsAs widely anticipated, the US Federal Reserve finally moved off zero and increased cash interest rates by 0.25% in its last meeting of 2015 held just before Christmas.

A number of market commentators now view this as a mistake with no signs of inflationary pressures, financial market dislocation and data showing the US economy barely grew at all in the last quarter of 2015, all suggesting a rate rise wasn’t warranted.

While we are probably unlikely to see the Fed doing a complete backflip and cutting rates; it seems likely the pace of monetary policy tightening will be very gradual.

In Australia, the RBA sat pat for the 7th meeting in a row in December leaving the cash rate at 2%. With the ebbing of the mining boom a decent case can be made for the central bank to

cut rates further in order to aid the difficult rebalancing to other sectors of the economy. However, the RBA does not want to push residential property prices (particularly in Sydney) even higher and so has found its hands tied. Last year, non interest rate tools were introduced in order to dampen down some of the more speculative elements of the housing market. The effect of these “macro-prudential” policies has been the banks have increased interest rates on loans to investors in residential property. This in turn is now showing up in property price data, with prices flattening out over the last few months.

It would seem then, that the RBA’s hands are no longer tied and we wouldn’t be surprised to see rate cuts in 2016.

Australian Equities This less than stellar performance of Australian shares reflects the fate of commodities generally as falling Chinese demand

How have the markets performed?Asset Class Returns as at 31 December 2015 unless otherwise stated

Asset Class 10 Yr (%p.a.)

5 Yr (%p.a.)

3 Yr (%p.a.)

1 Yr (%)

YTD (%)

6 Mth (%)

3 Mth (%)

1 Mth (%)

Cash1 4.5 3.4 2.6 2.3 2.3 1.1 0.5 0.2

Australian Bonds2 6.2 6.6 4.7 2.6 2.6 1.9 -0.2 0.3

International Bonds3 7.3 7.1 5.5 3.6 3.6 3.1 0.5 0.0

Australian Shares4 5.7 6.5 9.3 3.8 3.8 0.4 6.6 2.6

International Shares Unhedged5 5.1 15.5 23.9 11.8 11.8 2.1 1.7 -2.3

International Shares Hedged6 7.1 12.8 16.0 4.1 4.1 -1.0 6.7 -2.1

Emerging Markets Unhedged7 3.7 1.9 5.0 -4.3 -4.3 -12.7 -2.8 -2.6

Listed Infrastructure Unhedged8 5.2 11.6 17.0 -1.2 -1.2 -4.3 -5.8 -3.1

Australian Listed Property9 2.0 15.3 15.9 14.4 14.4 7.2 6.0 4.0

International Listed Property Unhedged10 N/A 16.5 20.6 12.1 12.1 10.5 1.3 0.41Bloomberg AusBond Bank 0+Y TR AUD, 2Bloomberg AusBond Composite 0+Y TR AUD, 3JPM GBI Global Ex Australia TR Hdg AUD, 4S&P/ASX All Ordinaries TR, 5MSCI World Ex Australia NR AUD, 6MSCI World ex Australia NR AUD Hedged, 7MSCI EM NR AUD, 8S&P Global Infrastructure NR AUD, 9S&P/ASX 300 AREIT TR, 10FTSE EPRA/NAREIT Global REITs NR AUD

ClearView Managed Investments distributions*The distributions shown below are for 30 June 2015. Depending on the distribution frequency this distribution may relate to the month, quarter, half year or year. For more information please contact your financial adviser.

Investment Option Distribution Cents Per Unit

Reinvestment Price

Conservative 2.2324 0.9564

Cautious 2.9142 0.9552

Prudent 3.1898 0.9184

Assertive 3.5107 0.8835

Aggressive 3.6208 0.8022

* Please note some options may distribute more than once a year. Your Annual Statement includes information on all distributions for the financial year. You can also access the information by logging on to your account online. Contact us on 132 977 if you require assistance or would like more information.

Investment Option Distribution Cents Per Unit

Reinvestment Price

Monthly Payment 0.1600 1.1404

Diversified Stable 3.9862 1.1169

Diversified Balanced 4.0294 1.2043

Diversified Growth 4.0349 0.9488

Australian Shares Growth 1.9876 0.9561

Continued overleaf

Asset Class Returns


Ask Mel

QA group of us at work have been offered a redundancy payout and we were told that because of the

redundancy payment, we can’t approach Centrelink for any benefits for a certain period of time. Some have been told they have to wait 80 weeks and then others only have to wait 25 weeks.

Can you please explain why Centrelink block payments when a redundancy is received and why are the waiting times different for different people?

AWhen a redundancy payment is received, Centrelink may apply what is known as the Income Maintenance

Period which is like a waiting period based on the size of the redundancy payout and any unused annual and long service leave entitlements received. Effectively, Centrelink treat these payments as income to be used to meet your living expenses before any Government entitlements become available.

Let’s look at a simple example. If Heather is made redundant and receives a payment equal to 20 weeks of salary as well as receiving accrued annual leave of 6 weeks,

her total waiting period for Centrelink benefits will be 26 weeks. That’s why the waiting period can differ as it depends on the individual’s specific redundancy amount and accrued leave.

It’s important to note that the Income Maintenance Period only applies to some Centrelink entitlements including NewStart Allowance, Parenting Payment, Disability Support Pension and Youth Allowance. It does not apply to those claiming an Age Pension.

QCan you please confirm if the earnings from an insurance bond are 100% tax free? I have read that

insurance bonds are effective investments to reduce tax as you receive the proceeds of the investment tax free at redemption. This sounds too good to be true.

AInsurance bonds (sometimes referred to as investment bonds) have a unique status when it comes to

Australian tax rules. While redemptions can be made after 10 years with no tax payable by the owner, earnings are still taxed within the fund.

Tax is applied to investment earnings at a maximum rate of 30%. The actual tax rate paid may be lower than 30% due to imputation credits and other benefits available within each investment option. For those on a high marginal tax rate, this rate may compare favourably whereas for others, 30% may seem high compared to superannuation where earnings are taxed at 15% and superannuation income streams where a nil tax rate applies.

As insurance bonds do not distribute income, there are no annual tax return obligations. Unlike managed funds and direct shares where you are required to include all income distributions and dividends in your tax return (even if they are reinvested and not actually received), you do not have to include any earnings from the insurance bond in assessable income until a withdrawal is made and only then if the withdrawal is made within the first 10 years.

Generally, once an insurance bond has been held for 10 years, you can receive the earnings as a redemption and pay no tax. If withdrawals are made from the investment within the 10 years, tax is applicable however various concessions are available.

CVM

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Ask MelClearView’s Technical Manager Melinda Bendeich answers your financial questions.

Continued from page 15

met increasing global supply. With mining and energy stocks making up a good proportion of the ASX the end result isn’t too surprising. Both the resources and energy sub-sectors of the ASX 200 lost a quarter of their value over 2015.

Other sectors had a happier 2015 and ensured the past year wasn’t a complete washout for Australian shares. Utilities

were the top performing sector returning 23%. Consumer discretionary (18%), industrials (16%) and healthcare (16%) also did well.

International EquitiesThe depreciating Australian dollar ensured currency unhedged international equities outperformed hedged last year. While it

was a lot easier call to make when the Australian dollar was north of $1.10 US dollars, we think the Australian dollar still has room to fall a bit further as the Australian economy continues to negotiate the difficult transition forced upon it by the end of the mining boom.

We’ve moved!Level 15, 20 Bond Street,Sydney NSW 2000Still the same building, just a new level!

OUR NEW ADDRESS

Have a question for Mel?You could have your question featured in the next edition of Viewpoint. Email your query to Mel at [email protected].

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