FirstChoice Wholesale Defensive - Colonial First State

FirstChoiceWholesaleDefensiveAustralian SharesGlobal SharesEmerging MarketSharesProperty SecuritiesFixed InterestCashFirstChoice Wholesale DefensiveInvestmentsPersonal superPensionFirstChoice Wholesale Option Profile & Commentary - March 20143 month 6 month 1 year 3 years 5 years 10 years Since Inception Fund size Management(%) (%) (%) pa (%) pa (%) pa (%) pa inception datecosts*Investments 1.30 2.54 4.45 6.28- 7.31 5.80 5.89 May 2002 $65.05m 0.86%Distribution Return 0.49 1.09 2.41 4.22- 4.92 5.45 5.64Growth Return 0.81 1.45 2.04 2.06- 2.39 0.36 0.25Personal super 1.19 2.31 4.06 5.66- 6.52 - 5.04 Aug 2004 $106.53m 0.89%Pension 1.33 2.62 4.55 6.37- 7.40 - 5.91 Jul 2004 $239.04m 0.89%Benchmark^ 1.39 2.43 4.50 6.59- 6.69 6.36^Custom benchmark. For further information please contact usPast performance is not an indicator of future performance for this option or any other option available from Colonial First State.All returns are calculated on an annualised basis using exit price to exit price with distributions reinvested, net of management costs, transaction costs and for FirstChoice Personal Super and FirstChoice Employer Super net oftax payable by the trustee. All return calculations exclude contribution surcharge, excess contribution tax or individual taxes payable by the investor and all other fees and rebates disclosed in the relevant product disclosurestatements available on our website or by calling us. For FirstChoice Investments, the ‘distribution’ component is the amount paid by the way of distribution, which may include net realised capital gains.* Management costs include management fees, estimated performance fees (if applicable), investment expenses and custody fees but do not include contribution fees, transaction costs or adviser or plan service fees which mayalso apply. Please refer to the PDS for full details of the applicable fees and costs.Investment objectiveTo provide relatively stable returns with low potential for capital loss. To outperform the option's composite benchmark over rolling three-year periods before fees andtaxes.Investment strategyTo allocate 90% of the investments to defensive assets such as fixed interest and cash to provide the portfolio with relatively stable returns. 10% of the portfolio isallocated to growth assets, such as shares and property, to improve diversification and performance. In order to provide additional diversification, the portfolio isallocated across a number of leading investment managers. The allocations to global shares and emerging market shares will not be hedged back to the $A.Investment categoryDefensiveMinimum suggested timeframeAt least 3 yearsQuarterly contribution per asset class2.0%1.0%0.0%Income distributionCents perunitFrankinglevelRealisedcapitalTotal 12/13 fin yr 3.78 5% 11%Total 11/12 fin yr 4.47 4% 2%-1.0%Manager allocationAustralian shares 5.00% Global shares 2.70% Fixed interest 50.00%Tyndall Investment Management 0.54% Capital International 0.30% Colonial First State 6.50%Schroder Investment Management 0.61% Baillie Gifford 0.19% Wellington Management 8.00%Colonial First State Core 0.20% Sarasin & Partners 0.37% Franklin Templeton Investments 3.50%Perennial Value Management 0.54% Bernstein Value Equities* 0.27% Loomis Sayles 5.75%Alphinity Investment Management 0.54% Hexavest 0.33% Colchester Global Investors 3.50%Colonial First State Core LS 0.27% Acadian Asset Management 0.37% H2O Asset Management 3.00%State Street Global Advisors 0.30% J O Hambro 0.17% Morgan Stanley 4.50%Realindex - Australian Share 2.00% Realindex - Global 0.70% Colonial First State - Indexed 15.25%Property Securities 2.00% Emerging market share 0.30% Cash 35.00%Colonial First State 1.00% Realindex - Emerging Markets 0.30% Colonial First State 7.00%Renaissance Asset Management 1.00% CBA Investment Deposits - 2017 3.50%CBA Deposits 15.75%CBA Investment Deposits - 2018 5.25%CBA Investment Deposits - 2019 3.50%Yield 5.00%Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of interests in FirstChoice Personal Super, FirstChoice Wholesale Personal Super, FirstChoice Pension,FirstChoice Wholesale Pension and FirstChoice Employer Super from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. The investment information in this option profile is historical, produced as atthe date specified above. The information below (except performance and key data information) relates to the FirstChoice Wholesale Investments option only. Information for other options in the FirstChoice product range will bedifferent and is available at colonialfirststate.com.au or by calling us on 13 13 36. We may change asset allocation and securities within the option at any time. Past performance is not an indicator of future performance for thisoption or any other option available from Colonial First State.FS1516

FirstChoice Wholesale Option ProfileInvestmentsPersonalSuperPensionFirstChoice Wholesale Defensive – 31 March 2014Please note this is the view of the fund manager who manages this option.Market reviewThe Reserve Bank of Australia (RBA) maintained the cash rate at 2.5%throughout the quarter, reiterating its commitment to a period of stableinterest rates for the foreseeable future. Australian economic dataimproved during the quarter, with stronger than expected employment,retail sales and building approvals statistics.10-year Australian Government bond yields finished the quarter at 3.98%after trending lower on concerns about the geopolitical risks in Ukraineand Russia. Corporate bond spreads continued to tighten in the Marchquarter. There was limited reaction to the US Federal Reserve’s decisionto start tapering its Quantitative Easing program or the turmoil inemerging markets.Following a strong run in 2013, Australian shares made further progressin the March quarter of 2014. The S&P/ASX 100 Accumulation Indexadded 2.1%. Most ASX-listed companies reported their earnings for thesix or 12 months ending 31 December 2013 during the quarter, whichprovided a steady stream of company news. Most companies generatedearnings improvements through cost cutting initiatives which highlightedthat companies can improve their profitability, even in lacklustreeconomic conditions. Dividend payout ratios were also reasonably good,which adds to the potential return from Australian equities. The Australianshare market as a whole currently offers a dividend yield of nearly 5%.Global share prices were little changed in the first quarter of 2014, withthe MSCI World ex-Australia Index adding 0.4% in local currency terms.The Australian dollar strengthened during the period, however, whicheroded returns for Australian investors. The Index declined by 3.4% inAustralian dollar terms.Among developed markets, Europe and the USA both rose in value byaround 2%. Asian markets were weaker; the Japanese Nikkei 225 Indexand Chinese CSI 300 Index declined more than 6% and 4% respectively.Emerging regions tended to struggle too. Geopolitical tensions in Russiaand Ukraine, in particular, appeared to dampen risk appetite towardsemerging equity markets.Fund performance and activityThe portfolio produced a positive return for the March quarter andoutperformed its composite benchmark. This was the seventh quarter in arow that the portfolio has delivered positive returns and is a result ofcontinued strength in investment markets.The portfolio invests in a diversified range of sectors and for the quarterall sectors, except for global shares and emerging markets, had positivereturns. Despite continued concerns about bond yields, the portfolio’s50% allocation was the biggest positive contributor to the performance ofthe portfolio.Small positive contributions came from the portfolio’s 5.0% allocation toAustralian shares and the 2.0% domestic listed property.The portfolio’s 2.7% allocation to global shares, unhedged to movementsin the Australian dollar, was the biggest detractor to overall performanceof the portfolio, with the 0.3% allocation to emerging markets alsodetracting slightly.The 5% allocation to Yield (made in June 2013) made a positivecontribution to the overall result. The Yield allocation is managed byAcadian using their Quant Yield capability.Outlook and strategyThe fund aims to deliver relatively stable returns with low potential forcapital loss. The strategy is to spread investments across a range of assetclasses and investment managers in order to deliver these objectives.Although the primary allocation is to defensive assets, we will maintain asmall holding in growth assets such as shares, with the objective ofimproving diversification and performance.This document provides general advice only and is not personal advice. It does not take into account your individual objectives, financial situation or needs. ProductDisclosure Statements (PDSs) for all Colonial First State products are available at colonialfirststate.com.au or by contacting Investor Services on 13 13 36 or from yourfinancial adviser. You should read the relevant PDS and assess whether the information in it is appropriate for you, and consider talking to a financial adviser before makingan investment decision. Commonwealth Bank of Australia and its subsidiaries do not guarantee the performance of Colonial First State’s products or the repayment ofcapital by the products. Investments in these products are not deposits or other liabilities of the Commonwealth Bank of Australia or its subsidiaries and investment typeproducts are subject to investment risk including loss of income and capital invested. Information used in this publication, which is taken from sources other than ColonialFirst State is believed to be accurate. Information provided by the Investment Manager are views of the Investment Manager only and can be subject to change. Subject toany contrary provision in any applicable law, neither Colonial First State nor any of its related parties, their employees or directors, provides any warranty of accuracy orreliability in relation to such information or accept any liability to any person who relies on it.