Avbob - Old Mutual

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Expected Returns: Interest-Bearing Assets Inflation will increase from low levels, while local rates will probably remain flat = lower real returns on cash Local bonds will provide an attractive carry relative to cash, but are unlikely to re-rate Local property has been the best performing asset class again, and as a result we downgrade future real returns Offshore bonds remain an asset class to avoid 20
Long-Term Asset Allocation View Real Return View Comment SA Equity 6.0% Property 5.5% Bonds 2.5% Cash 1.5% International N N N N N Rand is becoming overvalued Full value on an absolute basis but still attractive. Grind higher. Expected return continues to fall Limited potential for capital gains but attractive carry vs. cash Lower rates for longer means lower returns Diversification is valuable Equity 6.5% Preferred asset class for 2011 Bonds 1.0% Cash 0.0% Longer-term bearish Cash is still unattractive 21 NB: These are long-term, real returns expected over the next five years 1 January 2011
Page 1 and 2: Asset Allocation: 2011 Outlook PETE
Page 3 and 4: Asset Class Returns For 12 Months t
Page 5 and 6: Interest rate-sensitive assets gain
Page 7 and 8: South Africa best performing major
Page 9 and 10: Philosophy: Theme vs. Price THEME
Page 11 and 12: Why increase offshore exposure? Di
Page 13 and 14: Valuation: SA no longer so cheap So
Page 15 and 16: Increase International Exposure Di
Page 17 and 18: Africa: The Last Frontier Populati
Page 19: Expected Returns: Equities SA
Page 23: Old Mutual Balanced Fund Asset Allo

Avbob - Old Mutual

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