Cbus Investment Update How Cbus invests in Australian shares: February

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1 Cbus Investment Update How Cbus invests in Australian shares: February Important information This presentation contains information about Cbus. Past performance of our investments is not a reliable indicator of how they will perform in the future. We haven t taken into account your specific needs in preparing this presentation, so you should look at your own financial position, objectives and requirements before making any financial decisions. You can learn more about how we invest for our members on our website and our publications. To decide whether Cbus is right for you we recommend you read the relevant Cbus Product Disclosure Statement. Contact or visit our website for a copy of our publication. Cbus Trustee: United Super Pty Ltd ABN AFSL Cbus ABN Cbus manages over $25 billion in superannuation savings for members. Of this, around $7.5 billion is invested in Australian shares that are listed on the Australian stock exchange. The Growth Option, which is where most members are invested, targets a 28.5% allocation to Australian shares. With us here today is Brett Chatfield, Cbus s Manager, Public Markets, to talk us through how Cbus invests in Australian shares. Thank you for joining us Brett.

2 Thanks Emily. Before we start talking about Australian shares, how has the Growth Option performed over the financial year to date? Over the six months ending December 2013, the Growth Cbus My Super Option returned 9.79% to members. This is an exceptional result, and was largely driven by very strong returns from the Australian and overseas share markets. Superannuation though is a longer term investment and we generally expect more moderate returns over the long term as there will be positives and negatives along the way. The return is based on the crediting rate, which is the return net of investment fees and taxes and the Trustee Operating Cost. This does not take into account the administration fee of $1.50 per week. Brett, why does Cbus invest in Australian shares? Australian shares form an important component of the growth allocation within the Fund. While shares are a risky asset class, we do consider that over the long term this risk will be rewarded, with returns well above fixed interest and cash. When we invest in Australian shares, we are acquiring part ownership in Australian companies. And we are seeking returns from from two components, being dividends and share price growth.

3 What kind of companies does Cbus invest in? We invest in around 300 Australian companies, and our portfolio is well diversified across a range of different industries. We invest in many companies that our members would recognise, such as large companies including BHP, the big four banks and Telstra, as well as some smaller companies such as REA Group (the Realestate.com business). At 31 December, the Top 10 Shareholdings make up 41.2% of Cbus Australian Shares portfolio: TOP 10 SHAREHOLDINGS AS AT 31 DECEMBER 2013 % OF CBUS AUSTRALIAN SHARES ASSET CLASS BHP BILLITON LIMITED (BHP) 7.82% WESTPAC BANKING CORPORATION 5.70% COMMONWEALTH BANK OF AUSTRALIA 5.62% AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 5.21% NATIONAL AUSTRALIA BANK 4.77% TELSTRA CORPORATION LTD 4.04% WESFARMERS LIMITED 2.36% TWENTY-FIRST CENTURY FOX 2.04% RIO TINTO LTD 1.89% WOOLWORTHS LIMITED 1.77% How does Cbus invest in companies? Emily, Cbus appoints a range of specialist fund managers to invest in Australian shares on our behalf. These managers are selected after an extensive due diligence process, and there

4 are a range of different investment styles and approaches adopted by the managers, which provides is with further diversification within the Fund. Currently we target at the 25% allocation to one enhanced index manager and 75% to a range of active managers. Brett, you mentioned that Cbus invests through index and active managers, what does this mean? Well index managers largely seek to replicate the return from a defined market (such as the ASX 100 or ASX 200). The manager may also seek to extract additional modest outperformance through the use of enhancement strategies. Index managers provide very low cost access to the broader market. Alternatively, active managers seek to outperform the index. They do this by selecting and adjusting through time, a group of shares that they consider will, together, deliver higher returns than the market over the longer-term. Active managers will undertake detailed research on the individual companies in order to make an assessment of their likely future prospects. Over the long-term we would expect that active Australian shares managers should deliver good above-index returns for the Fund. To-date this has been the case, with the Fund s Australian shares portfolio comfortably outperforming the ASX 300 Accumulation index. Thanks Brett for talking with us about Australian shares. Thanks Emily.

5 Emily Late last year Cbus Property announced yet another development would be undertaken in Melbourne. 447 Collins Street is in a prized location in Melbourne. The project is expected to create around 5,000 construction jobs over the life of the project. Work is now underway at Cbus Property on the detailed plans for the site. Web address across the last part of this cut For more information on Cbus Property projects, visit the website.