IOOF Investments Snapshot · Simon Gross Portfolio Manager, Property Juanita Escobar Portfolio...

IOOF Investments Snapshot

31 March 2017

IOOF MultiSeriesIOOF MultiMixIOOF Cash ManagementIOOF Balanced Investor

IOOF InvestmentsInvestment management team

Our impressive investment capabilities are driven by our investment team and structure. Each asset class has a dedicated portfolio manager who enjoys strong support from a host of support staff including analysts, investment and marketing specialists.

Steve MerlicekChief Investment Officer

Dan FarmerPortfolio Manager, Australian Equities

Stanley YeoPortfolio Manager, Strategy and International Equities

Ray KingPortfolio Manager, Alternatives

Simon GrossPortfolio Manager, Property

Juanita EscobarPortfolio Manager, Cash

Osvaldo AcostaPortfolio Manager, Fixed Income

Angus KnapmanProperty Manager

Rhodri PaynePortfolio Manager, Implementation

Tim CooperPerformance Analyst

Charles KnealeNational Specialist, IOOF Multi-Manager Investment Solutions

1

IOOF Investments Snapshot | 31 March 2017

Contents

Market insights

Commercial office investments –

where to from here? 2

Strategic tilting update

Cash and fixed interest 3

International shares 3

Currency 3

IOOF MultiSeries

Summary 4

Underlying investment managers 5

IOOF MultiSeries diversified trusts

IOOF MultiSeries 30 6




IOOF MultiMix

Summary 8

Underlying investment managers 9

IOOF MultiMix single sector trusts

IOOF MultiMix Australian Shares 10

IOOF MultiMix International Shares 10

IOOF MultiMix Diversified Fixed Interest 11

IOOF MultiMix Cash Enhanced 11

IOOF Trust

IOOF Cash Management 12

MultiMix wholesale single sector trusts

Property 13

Alternatives and Defensive equities 14

IOOF MultiMix diversified trusts

IOOF MultiMix Capital Stable 15

IOOF MultiMix Conservative 15

IOOF MultiMix Moderate 16

IOOF MultiMix Balanced Growth 16

IOOF MultiMix Growth 17

MySuper fund

IOOF Balanced Investor 17

2

Commercial office investments – where to from here?The current Australian commercial property market can broadly be broken into two categories: the first being the hot markets of Sydney and Melbourne and the second being the balance of the state capital cities which, for a range of reasons, are not experiencing such strong investor and tenant demand. So why are the Sydney and Melbourne markets so hot and, perhaps more importantly, where are they going to from here?

The Sydney and Melbourne commercial property markets both enjoyed and benefited from substantial tailwinds in 2016 and most of these factors have continued to influence the sector in early 2017.

A fairly unique combination of forces including improved tenant demand, falling vacancy rates, low interest rates, moderate new construction levels, removal of existing stock for redevelopment or alternate use, strong demand from international investors and a broad increase in investors’ allocation to the property sector have all influenced the market and has led to rising capital values and effective rental growth in the central business districts and many metropolitan locations.

Sydney in particular has benefited from the tightening market conditions. After an extended run of improving fundamentals, the Sydney commercial property market may be considered to be at or about the top of the current cycle. As a consequence, investment grade property is not cheap, however nor is it extremely expensive by historic or international standards.

In Melbourne, the CBD enjoyed the strongest quarterly absorption of commercial accommodation in the first three months of the year of any Australian capital city, resulting in a fall in vacancy from 8.1% to 7.5% for all grades of office space.

Looking forward, interest rates and the spread between bonds and property yields is on many property investors’ minds, however currently there is a generous spread between these two indicators and it is generally understood that the property market can absorb moderate increases in bond rates, if and as they eventuate over time. A moderate outlook for the

broad Australian economy suggests that the existing relatively low interest rate environment may persist for a considerable period.

Even if there is a gradual increase in global long-term bond rates, history illustrates that such a trend is not overly detrimental to investment property as it is to some degree a consequence of improving broad economic trends that in turn generally lead to greater demand for office space. Conversely a dramatic or unforeseen increase in rates may be detrimental to the sector as investors may look to reduce their allocation to property and create an imbalance if there is a large volume of buildings for sale with a reduced appetite from purchasers.

Investing in property should be a long-term strategy and experienced managers are able to identify and secure properties at any point in the cycle that will generate strong long-term investment returns. Either by unlocking hidden value, repositioning or enhancing existing assets or by identifying demographic, infrastructure or individual sector and location trends, savvy investors will continue to generate good returns from the Sydney and Melbourne commercial office market over the long term.

What is necessary throughout 2017 is the continued and diligent application of well-considered and successful strategies. Good managers will not lose focus of their investors’ risk profiles and expectations and will strictly follow their core investment strategies. The key fundamentals of prime location, building quality, proximity to infrastructure, social amenities, cultural and demographic trends have never been more important and the Sydney and Melbourne commercial office markets are well placed to meet investors’ needs moving forward.

By Simon Gross

IOOF Investments Portfolio Manager, Property

3


Strategic tilting update

Cash and fixed interest

Position

For both MultiMix and MultiSeries, there is an overweight to cash/short duration strategies, underweight to fixed interest.

Rationale

Our view is that Australian and US Government bond yields are very expensive. The US 10 year Government bond yield as at end of March was 2.40% slightly down from 2.45% at the end of December. Despite the recent sharp jump in bond yields, we believe this may be the end of the bull market in fixed interest.

Current status

Since inception, the tilt to cash has underperformed as global bonds continue to produce positive returns. The underperformance, however, is somewhat mitigated by strong performance from the underlying cash managers, and strong returns from the IOOF Income Trust.

For MultiMix over the March quarter, the IOOF Income Trust returned 1.38% and the Henderson Cash Enhanced Fund returned 0.87% versus the diversified fixed interest strategic benchmark return of 0.96%.

For MultiSeries over the March quarter, the Metrics Credit Partners Diversified Australian Senior Loan Fund returned 1.09% and the Henderson Income Fund returned 1.53% outperforming the MultiSeries Fixed Income strategic benchmark return of 0.96%.

International shares

Position

For MultiMix, tilt towards unhedged international shares from Australian shares. Tilt only in place for IOOF MultiMix Growth Trust, and has been reduced for IOOF MultiMix Balanced Growth Trust.

Rationale

While both Australian and international shares looked cheap on various valuation metrics, we believed international shares showed better value, particularly in the US. In addition, the high Australian dollar made investing offshore more attractive. Unhedged international equities also provides for a natural hedge. If equity markets fall, the Australian dollar tends to fall with it (as it is considered a risk asset), thus providing a hedge to investors.

Current status

Since inception, the tilt to unhedged international shares has outperformed due to both the international equities market outperforming the Australian equities market, and a sharp decline in the Australian dollar.

For the March quarter, the unhedged international shares benchmark underperformed the Australian shares benchmark by 3.3% (1.4% versus 4.7%).

Currency

Position

For MultiMix, the hedged benchmark remains at 0% of the developed equities portfolio versus the strategic benchmark of 50%. For MultiSeries, the hedged benchmark is at 35% versus the strategic benchmark of 50%.

Rationale

The key reasons for this continued position are:

• The carry trade will fade rapidly as cash rates enter a strong uptrend in the US.

• Risks to the Australian economy are to the downside and to the US economy are to the upside.

• US dollar strength likely on the back of higher budget deficits under a Trump presidency. However, already rich valuations and limited scope for policy divergence will likely restrain the US dollar’s upside potential.

Current status

For the March quarter, the unhedged developed international shares benchmark underperformed the hedged developed international shares benchmark by 4.8% (0.9% versus 5.7%).

By Simon Gross

IOOF Investments Portfolio Manager, Property

4

IOOF MultiSeries Summary

Full details of the investment strategy, objectives and underlying managers for each Trust are provided in the trust profile which can be downloaded from www.ioof.com.au/investment-central

Trust APIR code Risk/return profile

Estimated management costs as at 4 October 2016 % pa*

Performance fee as at 4 October 2016 % pa^

Growth / Defensive

MultiSeries diversified

IOOF MultiSeries 30 IOF0253AU Low to medium 0.40 0.00

Growth 30%Defensive 70%

IOOF MultiSeries 50 IOF0254AU Medium 0.45 0.00


IOOF MultiSeries 70 IOF0090AU Medium to high 0.50 0.00

Defensive 30%Growth 70%

IOOF MultiSeries 90 IOF0255AU High 0.55 0.00


* This estimated fee currently includes the investment management fee and indirect costs. See pages 15 and 16 of the IOOF MultiSeries PDS for full details on fees and other costs.

^ Currently, there are no performance-based investment management fee arrangements in place with any of the underlying investment managers of the Trusts.

5


Underlying investment managersOver the last quarter the following changes were made to our underlying investment manager line-up.

New inclusion in the trusts: Invesco (Australian shares)

Removal from the trusts: None

Manager Style

IOO

F M

ultiS

erie

s 30

, 50,

70

and

90

IOOF Investment Management Limited Short-term money market securities

Cash

and

sho

rt-

term

sec

urit

ies

Henderson Global Investors (Australia) Institutional Funds Management Limited

Australian fixed interest

Div

ersi

fied

fixed

inte

rest

Metrics Credit Partners Pty Limited Australian corporate loans

Western Asset Management Company Australian bonds

Legg Mason Brandywine Global Investment Management, LLC

Top-down, value-driven

Invesco Australia Limited International core fixed income

IOOF Investment Management Limited Core

Prop

erty

Macquarie Investment Management Limited True index (Australian and global property securities)

Acadian Asset Management (Australia) Limited Small companies

Aus

tral

ian

shar

esHenderson Global Investors (Australia) Institutional Funds Management Limited

Mid cap focused growth

Invesco Australia Limited Quantitative 130/30

IOOF QuantPlus Enhanced passive

Platypus Asset Management Pty Limited Quantitative/Quality momentum

State Street Global Advisors, Australia, Limited Enhanced passive

UBS Global Asset Management (Australia) Ltd Fundamental high conviction

Goldman Sachs International Multi-factor index

Inte

rnat

iona

l sha

res

Challenger Limited Index plus 0.5%

IOOF QuantPlus Passive

Neuberger Berman Australia Pty Limited Emerging markets

State Street Global Advisors, Australia, Limited Managed volatility

TT International Emerging and developed markets

Invesco Australia Limited Global targeted return

Alt

erna

tive

s

Macquarie Investment Management Limited True index (global infrastructure)

Metrics Credit Partners Pty Limited Secured Australian private debt

6

IOOF MultiSeries diversified trustsIOOF MultiSeries 30

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 na na na na na na

Growth 1.42 na na na na na na

Total 1.42 na na na na na na

Changes to portfolio

Within the Australian shares portfolio, Invesco Australian Equity Long / Short Fund was appointed in February. The inclusion of Invesco increases the expected return of the Australian shares portfolio and provides a further positive point of differentiation to other low cost multi-manager offerings.

Contributors and Detractors

Contributors to performance

• The fixed interest portfolio performed particularly well, with all managers outperforming, particularly Brandywine.

Detractors from performance

• The Australian shares portfolio underperformed its benchmark.

• The international shares portfolio also underperformed its benchmark.

• Lower hedging compared to the strategic benchmark detracted from value as unhedged international shares underperformed hedged international shares.

Actual versus target allocation

IOOF MultiSeries 50

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa














Actual allocation Target allocation

AustralianShares

Internationalshares

Property Alternatives Diversi�ed�xed

interest

Cash andshort-termsecurities

0

10

20

30

40

50


0

5

10

15

20

25

30

35

40

AustralianShares

Internationalshares


interest


7


IOOF MultiSeries 70

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 1.28 10.47 11.62 9.69 7.39 6.50

Growth 2.30 2.96 0.74 -8.11 -1.79 2.34 0.78

Total 2.30 4.24 11.20 3.50 7.91 9.72 7.28











IOOF MultiSeries 90

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa








• The alternatives strategies outperformed their benchmarks.








0

5

10

15

20

25

30

AustralianShares

Internationalshares


interest



0

5

10

15

20

25

30

35

40

AustralianShares

Internationalshares


interest


8

IOOF MultiMix Summary

Full details of the investment strategy, objectives and underlying managers for each Trust is provided in the trust profile which can be download from www.ioof.com.au/investment-central

Trust APIR code Risk/return profile

Total fee as at 30 June 2016 % pa1

Excluding performance fee as at 30 June 2016 % pa

Growth/Defensive

MultiMix single sectorIOOF MultiMix Cash Enhanced

IOF0091AU Low 0.35 0.35


IOOF MultiMix Diversified Fixed Interest

IOF0096AU Low/Medium 0.40 0.49


IOOF MultiMix Australian Shares

IOF0092AU High 1.47 0.80


IOOF MultiMix International Shares

IOF0098AU High 0.86 0.90


MultiMix diversifiedIOOF MultiMix Capital Stable

IOF0094AU Low 0.47 0.51


IOOF MultiMix Conservative

IOF0095AU Low/Medium 0.70 0.73


IOOF MultiMix Moderate

UFM0051AU Medium 0.85 0.80


IOOF MultiMix Balanced Growth

IOF0093AU Medium/High 1.06 0.91


IOOF MultiMix Growth

IOF0097AU High 1.17 0.96


Cash Management and Balanced InvestorIOOF Cash Management (Class A)

PIM0002AU Low 0.30 0.30


IOOF Balanced Investor

IOF0232AU Medium/High 0.50 0.50


9


Underlying investment managersOver the last quarter the following changes were made to our underlying investment manager line-up.

New inclusion in the trusts: None

Removal from the trusts: None

Manager Style

IOO

F M

ulti

Mix

Gro

wth

Tru

st

IOO

F M

ulti

Mix

Bal

ance

d G

row

th T

rust

IOO

F M

ulti

Mix

Mod

erat

e Tr

ust

IOO

F M

ulti

Mix

Con

serv

ativ

e Tr

ust

IOO

F M

ulti

Mix

Cap

ital

Sta

ble

Trus

t

IOO

F M

ultiM

ix D

iver

sifie

d Fi

xed

Inte

rest

Tru

st

IOO

F

Mul

tiMix

Cas

h En

hanc

ed T

rust


Enhanced cash

Cash

and

shor

t-ter

m

secu

ritie

s

IOOF Investment Management Limited Short-term money market securities


Fundamental active

Div

ersi

fied

fixed

inte

rest

IOOF Investment Management Limited Income focusMetrics Credit Partners Pty Limited Australian corporate loansBlueBay Asset Management LLP Emerging market debtBrandywine Global Investment Management, LLC

Top down value driven

Macquarie Investment Management Limited Active short duration creditPIMCO Australia Pty Ltd Core plus, multi-strategyLegg Mason Western Asset Management Company

Global total return

Western Asset Management Company US bank loansFidante Partners Limited Broad cap core

Prop

erty

IOOF Investment Management Limited CoreLegg Mason Martin Currie Australia Limited Small capBT Investment Management (RE) Limited Active, value-driven, risk controlledCohen & Steers Capital Management, Inc. Core, bottom-upResolution Capital Limited High conviction,

benchmark-unaware

IOO

F M

ultiM

ix A

ustr

alia

n Sh

ares

Tru

st

AllianceBernstein Investment Management Australia Limited

Managed volatility

Aus

tral

ian

Shar

es

Acorn Capital Limited Micro-capsVinva Investment Management Limited QuantitativeHenderson Global Investors (Australia) Institutional Funds Management Limited

Bottom-up, growth

Legg Mason Martin Currie Australia Limited Dynamic valueOC Funds Management Limited Small cap

DNR Capital Growth/qualityBoutique Manager Portfolio Diversified Australian sharesDefensive Equities Trust Defensive equities

IOO

F M

ultiM

ix In

tern

atio

nal

Sha

res T

rust

EAM Global Investors LLC Emerging markets small caps

Inte

rnat

iona

l Sha

resState Street Global Advisors, Australia,

LimitedManaged volatility

Wellington International Management Company Pte Ltd

Growth

Antipodes Partners Pragmatic value, absolute returnLSV Asset Management Quantitative valueTT International Growth at reasonable price and

concentrated quality

We have a large number of underlying managers for our exposure to alternative assets. These managers are not listed separately due to the size of the list and the fact that the allocation to each manager is small.

Alte

rnat

ives

10

IOOF MultiMix single sector trustsIOOF MultiMix Australian Shares

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 0.90 3.87 3.20 3.21 3.19 3.48

Growth 2.58 3.00 10.41 0.54 3.24 6.71 2.66

Total 2.58 3.90 14.29 3.74 6.45 9.90 6.13

Benchmark 4.71 9.88 20.24 4.44 7.50 10.83 7.20


Investments in new portfolios, OC Micro Cap and Acorn Micro Cap, were made opportunistically over the quarter. Valuations in microcaps stocks have become more attractive compared to larger companies over the past few months.



• Performance of largest manager in the Trust, Vinva, very strong.

• Defensive manager AB Managed Volatility outperformed over a strong quarter.

• Value manager Martin Currie outperformed as stocks on lower valuations continued to rally.


• Overweight allocation hurt relative returns as smaller companies failed to match the strong returns of large companies over the quarter.

• Specialist small and mid-cap company managers, OC and Selector, produced only a small positive return over the quarter, significantly lower than the market return.

• Growth manager Henderson trailed the benchmark slightly over the quarter as high growth stocks generally trailed the market.

Investment manager allocation3

IOOF MultiMix International Shares

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 0.11 21.16 11.21 8.42 5.47 4.42

Growth 2.30 7.31 -4.47 -4.59 4.55 9.95 6.26

Total 2.30 7.42 16.69 6.62 12.96 15.42 10.68

Benchmark 1.38 8.43 15.86 5.00 12.25 15.32 10.90


There were no changes over the quarter.



• An overweight to Emerging markets as Emerging markets outperformed developed markets by almost 5%.

• Wellington had the highest level of excess returns.

• TT Emerging Markets, Antipodes Global and SSgA Global Managed Volatility outperformed their respective benchmarks.


• Growth outperformed Value by 4.3% so value manager LSV underperformed.

• Antipodes Asia, EAM and TT Global underperformed their respective benchmarks.


DNR Capital 13.18%

Legg Mason Martin Currie Australia Limited 15.63%

OC Funds Management

Limited 14.54%

Boutique Manager Portfolio 15.19%

IOOF Investment Management Limited 0.22%

AllianceBernstein Investment Management Australia Limited 4.37%

Acorn Capital Limited 3.17%

Vinva Investment Management Limited19.33%

Henderson Global Investors (Australia) Institutional Funds Management Limited 14.35%

LSV Asset Management 13.86%

TT International 14.73%

EAM Global Investors LLC 5.27%

Antipodes Partners 19.51%


TT International 8.98%

State Street Global Advisors, Australia, Limited 18.49%

Wellington International Management Company Pte Ltd 18.83%

11


IOOF MultiMix Diversified Fixed Interest

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.52 1.21 8.23 7.10 6.69 6.23 7.47

Growth 1.40 -0.51 -3.71 -4.08 -1.88 -0.65 -1.09

Total 1.91 0.70 4.52 3.02 4.82 5.58 6.38

Benchmark 0.96 -1.58 2.13 2.68 5.28 5.43 6.44


The portfolio credit quality was improved from A+ to AA- which is expected to result in better risk-adjusted returns. We maintained a moderate overweight in high investment grade corporate credit and positioned the portfolio with an underweight duration in order to provide capital protection from the risk of rising yields.



• Sector and security selection in high investment-grade credit, US loans and emerging market in our portfolio was a strong contributor.

• Duration and curve positions were the primary contributor for this quarter’s performance as the market expectations for further Fed hikes in 2017 were priced-in during the quarter.

• Brandywine, PIMCO, BlueBay and Henderson were strong contributors to overall performance.


• No detractors to note.


IOOF MultiMix Cash Enhanced

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.60 1.03 2.59 2.64 2.85 3.48 4.10

Growth 0.09 0.13 -0.02 -0.11 -0.21 -0.05 -0.03

Total 0.69 1.16 2.57 2.53 2.64 3.44 4.07

Benchmark 0.44 0.88 1.94 2.08 2.29 2.64 3.28


Outperformance was driven by sector allocation to credit and security selection to higher yielding, non-benchmark floating rate notes (FRNs) as credit spread tightened over the quarter.



• Allocation to Term Deposits, NCDs and cash notice accounts has contributed to the performance over the quarter.

• Allocation to higher yielding, non-benchmark floating rate notes (FRNs) and credit spread contraction added value.


• There were no significant detractors from performance.


Henderson Global Investors (Australia) Institutional Funds

Management Limited 20.03%

PIMCO Australia Pty Ltd 24.31%

Legg Mason Western Asset Management

Company 5.94%

Brandywine Global Investment Management,

LLC 19.44%

IOOF Investment Management Limited (Cash) 0.50%

Henderson Global Investors (Australia) Institutional Funds Management Limited (Cash) 9.38%

IOOF Investment Management Limited (Income Trust) 12.35%

BlueBay Asset Management LLP 2.55%

Western Asset Management Company 5.51%

Henderson Global Investors (Australia) Institutional Funds

Management Limited 62.60%


12

IOOF TrustIOOF Cash Management

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Total 0.49 0.98 2.14 2.22 2.45 2.86 3.45

Benchmark 0.44 0.88 1.94 2.08 2.29 2.64 3.28


The Trust maintains a significant allocation to cash notice accounts and TDs, which offers a significant yield premium compared to bank bills without compromising the overall liquidity.



• Allocation to Term Deposits, NCDs and cash notice accounts has contributed to the performance over the quarter, albeit these rates have significantly come down.


• There were no significant detractors from performance.

Allocation by Standards & Poors ratings3

TOTAL "A-1+" 53.0%

TOTAL "A-1" 18.9%

TOTAL "A-2" 28.2%

A-3 or below 0.0%

13


MultiMix wholesale single sector trusts


Fidante Partners Limited 63.0%


Legg Mason Martin Currie Australia Limited 36.5%


BT Investment Management (RE) Limited 20.3%

Cohen & Steers Capital Management, Inc. 27.4%


Resolution Capital Limited 51.4%

Allocation by property type3

Industrial 31.00%Commercial 69.00%

Property

Property – Australian


Our managers recognised the headwinds that are affecting some of the Australian retail REITs and increased their allocations to organisations with diversified development pipelines and strong internal management capabilities.

Contributors to performance • Allocation to Lend Lease.• Allocation to Peet & Co.• Allocation to Mirvac.

Detractors from performance • Allocation to Westfield.• Allocation to Vicinity Centres.• Allocation to Investa Office.

Property – International


Due to a loss of momentum in the US REIT sector there were opportunities identified in other economies, including China, where sentiment strengthened.

Contributors to performance • Underweight allocation to Japan.• Underweight allocation to US retail.• Overweight position in Singapore and Hong Kong.

Detractors from performance • Future bond yield uncertainty.• US political concerns.• Ongoing volatility.

Property – Direct


Having crystallised a substantial profit by selling a commercial office property in North Ryde late last year, the Trust is in the process of increasing its allocation to industrial property. An opportunity has been identified to acquire a brand new industrial asset in the tightly held Melbourne suburb of Altona North.

Contributors to performance • Market value increase at Glen Waverley property.• Reduced vacancy rate.• Successful tenant retention.

Detractors from performance • Rent incentives.• Short term capital expenditure.

14

AllianceBernstein Investment Management

Australia Limited 39.86%

Cash and short-term securities 0.73%

State Street Global Advisors, Australia, Limited 31.82%

Plato Investment Management Limited 27.59%

Private equity 45%

Cash and short-term securities 13%

Discretionary hedge 40%

Special situations 2%

MultiMix wholesale single sector trustsAlternatives and Defensive equities

Alternative – Growth


During the March quarter the portfolio continued to reduce its allocation to hedge funds and these funds were used to allocate more monies to private equity and build up our cash holding. The benchmark produced a slightly positive return for the quarter.

Contributors to performance • Invesco GTR is the largest allocation in the portfolio and this slightly

outperformed the portfolio benchmark.

Detractors from performance • The appreciation of the Australian dollar (versus the $US and the Euro)

reduced the performance of our global managers.• Other than Invesco GTR, hedge fund managers continued their poor

performance with weak results for the last quarter.• Private equity managers were mixed but generally modestly negative

in their contribution.

Alternative – Defensive


Cash holdings were increased in the quarter as redemptions from a hedge fund manager continued. Whilst performance remains strong relative to benchmark for the year to date, there was some underperformance in the March quarter.

Contributors to performance • Energy linked investments did well in the quarter.• Cash holdings were a modest contributor to performance.

Detractors from performance • The appreciation of the Australian dollar (versus the $US and the Euro)

reduced the performance of our global managers.• Private debt managers underperformed with no obvious reason.• Our special situations manager was slightly behind benchmark.



Infrastructure 19%

Subordinated debt 40%

Cash and short-term securities 28%

Credit opportunities (hedge fund) 13%

Discretionary hedge 0%

Investment manager allocation3Defensive – Equities


There were no significant changes to the portfolio over the quarter.

Contributors to performance • The defensively positioned portfolio significantly outperformed cash and

bonds, and only slightly trailed equities in a very strong quarter for equity markets.

• Defensive manager AB Managed Volatility outperformed over a strong quarter.

Detractors from performance • Income focused managed Plato trailed the equity market slightly as its

quantitative stock selection approach failed to fully capture the market rally.• Low volatility manager SSGA trailed the market as its exposure to more yield-

sensitive stocks hurt performance.

15


IOOF MultiMix diversified trustsIOOF MultiMix Capital Stable

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 1.02 6.22 5.32 5.70 5.61 6.24

Growth 1.82 0.82 0.07 -1.63 -0.76 0.22 -0.24

Total 1.82 1.84 6.29 3.68 4.93 5.83 6.01


Investments in new Australian equities portfolios, OC Micro Cap and Acorn Micro Cap, were made opportunistically over the quarter. Credit quality in fixed interest was improved to AA-.



• The diversified fixed interest portfolio outperformed its benchmark due to Brandywine significantly outperforming its benchmark.

• An overweight to defensive equities also added value.

• An underweight allocation to cash also added value as cash underperformed other asset classes.


• None of significance.

IOOF MultiMix Conservative

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 1.16 6.84 8.10 7.49 6.49 6.70

Growth 1.52 1.44 0.87 -4.26 -1.67 0.48 -0.15

Total 1.52 2.60 7.71 3.84 5.83 6.97 6.54


Investments in new Australian equities portfolios, OC Micro Cap and Acorn Micro Cap, were made opportunistically over the quarter. Credit quality in fixed interest was improved to AA-. Alternative defensive cash holdings were increased as hedge fund exposure was reduced.



• The diversified fixed interest portfolio outperformed its benchmark due to Brandywine significantly outperforming its benchmark.

• The international equities portfolio outperformed its benchmark.

• An underweight allocation to cash also added value as cash underperformed other asset classes.


• A zero hedge on international equities detracted the bulk of value as unhedged international shares underperformed hedged.

• The alternative defensive portfolio underperformed its fixed interest benchmark.

.Actual versus target allocation Actual versus target allocation


Alternative - defensive

Internationalshares

Australian shares

Property Cash andshort-termsecurities

Diversi�ed �xed

interest

0

10

20

30

40

50

Defensive Actual allocation Target allocation

Alternative International shares

Australian shares

Property Diversi�ed�xed

interest


0

10

20

30

40

50

Defensive

16

Actual versus target allocation Actual versus target allocation


Alternative - growth


Australian shares


interest


0

5

10

15

20

25

30

35


Defensive Actual allocation Target allocation



Australian shares


interest


0

5

10

15

20

25

30


IOOF MultiMix diversified trustsIOOF MultiMix Moderate

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 1.09 9.08 6.77 5.80 5.27 5.39

Growth 1.75 2.35 0.59 -2.57 1.22 3.12 1.46

Total 1.75 3.45 9.67 4.20 7.02 8.39 6.85


Investments in new Australian equities microcap portfolios were made opportunistically over the quarter. Credit quality in fixed interest was improved to AA-. Hedge fund exposure was reduced in the alternatives portfolios.



• The diversified fixed interest portfolio outperformed due to Brandywine significantly outperforming its benchmark.

• The international equities portfolio outperformed.

• An underweight allocation to fixed interest added value as fixed interest underperformed most other asset classes.



• Both alternatives portfolios underperformed.

• An overweight to the Income Trust detracted value.

• Both the Australian and Defensive Equities portfolios underperformed the Australian equities benchmark.

IOOF MultiMix Balanced Growth

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 0.82 11.39 10.70 8.51 6.52 6.25

Growth 1.46 3.01 -0.47 -6.33 -0.41 3.62 1.53

Total 1.46 3.83 10.92 4.37 8.11 10.14 7.78


Investments in new Australian equities microcap portfolios were made opportunistically over the quarter. A commercial property was sold. Hedge fund exposure was reduced in the alternatives portfolios.



• The international equities portfolio outperformed.• The diversified fixed interest portfolio outperformed as

Brandywine significantly outperformed its benchmark.• An underweight to diversified fixed interest added value as

fixed interest underperformed other asset classes.



• The Australian equities portfolio underperformed as a result of the overweight allocation to small caps.

• The alternative growth portfolio underperformed its equities benchmark.

• An underweight to Australian equities detracted value.

17


Actual versus target allocation Actual versus target allocation




Australian shares


interest


0

5

10

15

20

25

30

35

40



Cash and short-term securities

Diversi�ed �xed

interest

Property Australian shares

AlternativesInternational shares

0

5

10

15

20

25

30

IOOF MultiMix Growth

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 0.65 15.60 11.43 8.87 6.54 6.01

Growth 1.72 3.91 -2.79 -6.51 0.33 4.82 2.26

Total 1.72 4.57 12.81 4.91 9.20 11.37 8.26


Investments in new Australian equities microcap portfolios were made opportunistically over the quarter. A commercial property was sold. Hedge fund exposure was reduced in the alternatives portfolios.



• The international equities portfolio outperformed.• An overweight to international equities added value.• The diversified fixed interest portfolio outperformed as

Brandywine significantly outperformed its benchmark.• An underweight to diversified fixed interest added value as

fixed interest underperformed other asset classes.



• The Australian equities portfolio underperformed as a result of the overweight allocation to small caps.

• The alternative growth portfolio underperformed its equities benchmark.

• An underweight to Australian equities detracted value.

MySuper fundIOOF Balanced Investor

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 1.23 3.82 4.18 3.80 na na

Growth 2.25 3.02 7.46 0.39 4.83 na na

Total 2.25 4.25 11.28 4.57 8.62 na na

Benchmark 2.61 5.18 11.85 4.77 8.56 na na










18

Notes to the Snapshot

1. The total management costs are subject to change from time to time and may vary slightly from the estimated management costs (as detailed in the current PDS or any SPDS (if applicable)) depending on changes to the composition of the Trust’s underlying assets, changes in exposure to underlying investment managers and where any unusual or non-recurrent expenses are incurred. The total management cost listed includes any performance fees that may be charged by underlying investment managers. Please refer to the current PDS or SPDS for full details on fees and costs. Please refer to IOOF MultiMix, IOOF Balanced Investor Trust, IOOF MultiSeries PDS and the IOOF Cash Management Trust PDS for full details on fees and costs.

2. Performance is net of management costs and expenses. Performance is based on exit price to exit price for the period and assumes that all distributions are reinvested. Management costs and other expenses are accounted for in the exit price. Past performance is not a reliable indicator of future performance.

Full details of the benchmarks used are provided in IOOF MultiMix, IOOF Balanced Investor Trust, IOOF MultiSeries PDS and IOOF Cash Management Trust PDS.

3 Allocations may not sum to 100% due to rounding.

Important Note

Issued by IOOF Investment Management Limited (IIML) ABN 53 006 695 021, AFS Licence No. 230524, as Responsible Entity for IOOF MultiMix, IOOF Balanced Investor Trust, IOOF MultiSeries and the IOOF Cash Management Trust. IIML is a company within the IOOF group of companies which consists of IOOF Holdings Ltd ABN 49 100 103 722 and its related bodies corporate. IIML’s contact details can be found on www.ioof.com.au. This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser. You should obtain and consider a copy of the Product Disclosure Statement available from us or your financial adviser, before you acquire a financial product. Past performance is not a reliable indicator of future performance. Information has been prepared in good faith and with reasonable care, with information believed to be accurate and reliable at the time of publication. However, IIML and their respective officers, employees, agents and associated entities disclaim and exclude all liability for any loss or damage suffered by any person acting on any information provided in, or omitted from this document. This document has been based on information believed to be accurate and reliable at the time of publication. W

MA

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