RUSSELL INVESTMENTS

Long-term Investing Report 2016

The 18th edition of the annual report is the only widely available report that provides Australian investors with a comprehensive and factual comparison between the long-term returns of Australian residential investment property and key domestic and global asset classes - such as shares, fixed-interest investments and diversified managed funds. The report also takes into account the impact of tax and gearing, as well as the benefits of investments held within the superannuation system.

1

What has benefited investors in the past?

Domestic triple treat worked well in the last two decades*
*To 31 December 2015


Home bias

Australian shares added 1.1% extra p.a. over last 20 years* vs global


Australian Dollar

currency appreciation added 1.2%+ p.a. over 20 years*


Australian residential property

top performing asset class over last 20 years*

2

Where are the current risks?

Reversal of long-term trends emerging in the last few years, most pronounced in 2015


Home bias hurting investors

  • Australian shares , bonds and cash hit hard
  • Cracks appearing in residential property

Central bank divergence

After decades of declining global interest rates, central banks policies diverge.


Traditional shares and bonds not enough

Traditional assets and typical balanced funds falling short of common return targets (e.g. CPI + 4%)

3

Investors are at critical cross-roads

Continue relying on old ways and risk disappointment OR
Try different approach to increase chances of success.


Look beyond traditional shares and bonds

Consider alternative assets and strategies, e.g. high yield bonds, volatility strategies.


Innovative Toolkit

Access best-of-breed managers and high conviction strategies.


Navigate markets dynamically

Capture new return opportunities and respond to volatile market conditions quickly and efficiently.

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