Strategic Asset Allocation Table

0% GROWTH 30% GROWTH 50% GROWTH 70% GROWTH 85% GROWTH 100% GROWTH
Investment objectives
Minimum investment horizon 1 year 2 years 4 years 5 years 7 years 7 years
Performance objectives over min horizon
Ordinary Money (before tax) CPI + 0.45% pa CPI + 1.75% pa CPI + 2.70% pa CPI + 3.67% pa CPI + 4.41% pa CPI + 5.13% pa
Superannuation (15% tax rate) CPI + 0.04% pa CPI + 1.31% pa CPI + 2.23% pa CPI + 3.14% pa CPI + 3.89% pa CPI + 4.54% pa
Allocated pension (0% tax rate) CPI + 0.45% pa CPI + 1.91% pa CPI + 2.97% pa CPI + 4.02% pa CPI + 4.88% pa CPI + 5.63% pa
Portfolio characteristics
Defensive vs growth asset allocations 100/0 70/30 50/50 30/70 15/85 0/100
Benchmark asset allocations (%) (%) (%) (%) (%) (%)
Defensive asset sub classes
Cash 100 25 15 10 5 0
Australian fixed interest 0 25 20 10 5 0
International fixed interest 0 20 15 10 5 0
Alteratives 0 0 0 0 0 0
Total defensive assets 100 70 50 30 15 0
Growth asset sub classes
Australian shares 0 15 25 30 40 45
International shares 0 10 20 25 30 40
Listed property / Infrastructure 0 5 5 15 15 15
Direct property 0 0 0 0 0 0
Alternative assets - growth 0 0 0 0 0 0
Total growth assets 0 30 50 70 85 100
Note: The long term forecast returns, expected range of returns and frequency of negative returns are all based on AMP Financial Planning’s Accumulation
blend. The numbers will differ slightly for the Draw down blend.

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 0% GROWTH 30% GROWTH 50% GROWTH 70% GROWTH 85% GROWTH 100% GROWTH
Long term forecast returns (%) (%) (%) (%) (%) (%)
Ordinary Money –
Gross of tax (before tax)
Income 2.75 2.90 3.04 3.21 3.32 3.35
Capital gain 0.00 1.23 2.00 2.70 3.32 3.93
Total nominal return 2.75 4.13 5.04 5.91 6.64 7.28
Total real return 0.45 1.83 2.74 3.61 4.34 4.98
Superannuation
(after tax)
Income 2.34 2.61 2.85 3.07 3.28 3.34
Capital gain 0.00 1.08 1.75 2.37 2.90 3.44
Total return 2.34 3.69 4.60 5.44 6.19 6.78
Total real return 0.04 1.39 2.30 3.14 3.89 4.48
Pension
(after tax)
Income 2.75 3.07 3.35 3.61 3.86 3.94
Capital gain 0.00 1.23 2.00 2.71 3.32 3.93
Total return 2.75 4.31 5.35 6.32 7.18 7.86
Total real return 0.45 2.01 2.38 4.02 4.88 5.56
Expected range of returns
Gross of tax (before tax) -2.3 to 14.9 -4.2 to 17.4 -6.0 to 20.0 -10.5 to 25.9 -14.1 to 30.5 -17.7 to 35.1
Pension (0% tax rate) -2.2 to 14.9 -4.0 to 17.6 -5.8 to 20.2 -10.2 to 26.2 -13.7 to 30.9 -17.3 to 35.5
Superannuation (15% tax rate) -2.1 to 13.0 -3.7 to 15.4 -5.3 to 17.8 -9.3 to 23.2 -12.4 to 27.5 -15.6 to 31.7
Frequency of a negative return
Gross of tax (before tax) 1 in 13.7 yrs 1 in 10.3 yrs 1 in 6.9 yrs 1 in 4.8 yrs 1 in 4.1 yrs 1 in 3.7 yrs
Pension (0% tax rate) 1 in 14.3 yrs 1 in 10.8 yrs 1 in 7.2 yrs 1 in 5.0 yrs 1 in 4.3 yrs 1 in 3.9 yrs
Superannuation (15% tax rate) 1 in 13.3 yrs 1 in 10.1 yrs 1 in 6.9 yrs 1 in 4.9 yrs 1 in 4.3 yrs 1 in 3.8 yrs

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