31/10/2017. Australian vs Global investing in context. Investment Return. MSCI World SMSF ASSOCIATION INVESTING OVERSEAS WITHOUT LEAVING HOME

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1 OVERSEAS WITHOUT STEFAN MARCIONETTI PORTFOLIO MANAGER MAGELLAN ASSET MANAGEMENT Australian vs Global investing in context Investment Return MSCI world S&P/ASX 200 MSCI World Australia 2.6% Rest of the world 5 years 11.8% 18.0% Europe ex-uk 10 years 3.6% 5.0% 15 years 8.6% 5.0% UK US 20 years 8.2% 5.4% Japan 2 1

2 The Australian market is very skewed S&P / ASX 200 MSCI World REITS Telecom Utilities 53.6% Telecom Utilities REITS Materials 22.9% Industrials Materials Industrials Financials Health Care Health Care Energy Financials IT Consumer 13.4% IT Energy Consumer 37.7% Source: msci.com, spindices.com/indices/equity/sp-asx Businesses can be disrupted quickly NY Easter parade in 1900 (spot the car) NY Easter parade in 1913 (spot the horse) Source: US National Archives (left). George Grantham Bain Collection (right) 4 2

3 Self service automated checkouts Worldwide self serve checkouts increased from 111k in 2009 to 261k in 2016 (+135%) Source: 5 US Chewing Gum Sales Cumulative Change from % -2% -4% -6% -8% -10% -12% -14% -16% Source: Euromonitor

4 Examples of business model disruption Digital advertising platforms Amazon effect Driverless and electric vehicles 7 Industries at risk of disruption Digital advertising platforms Television Print Bricks and mortar retail Brand owners Amazon effect Driverless and electric vehicles Fossil fuel industry Automotive supply chain Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. Nothing contained herein should be construed as granting by implication, or otherwise, any license or right to use any trademark displayed without the written permission of the owner. 8 4

5 Brand disintermediation P&G case study 9 P&G - Dominant US brands 90% 80% 78% 70% 60% 50% 49% 44% 43% 40% 30% 33% 20% 10% 0% Laundry care Oral care Nappies/Diapers Razors Paper towels Source: Euromonitor and Nielsen. Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. Nothing contained herein should be construed as granting by implication, or otherwise, any license or right to use any trademark displayed without the written permission of the owner. 10 5

6 The P&G business model Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. Nothing contained herein should be construed as granting by implication, or otherwise, any license or right to use any trademark displayed without the written permission of the owner. 11 What potentially lies ahead for P&G? Business model disruption Lower returns Stock market de-rating Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. Nothing contained herein should be construed as granting by implication, or otherwise, any license or right to use any trademark displayed without the written permission of the owner. 12 6

7 What do the experts say?

8 Portfolio positioning 15 How are we positioned? Defensive Cautiously positioned around interest rates and disruption Cash Offensive 42% in global technology, yet well diversified Defensive retail 15% Technology Staples Restaurants 4% 4% 11% 42% Technology platforms: 22% Consumer Advertising ecommerce Healthcare 12% 5% 7% Financials Home improvement Payments: 12% Enterprise software: 8% Data as at 30 June

9 Navigating disruption Technology winners Consumer tech platforms 22% Payments 12% Enterprise software 8% Low risk of disruption Quick service restaurants 11% Insulated retailers 7% Hospitals 3% Source: Magellan Asset Management Limited. Data as at 30 June Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. Nothing contained herein should be construed as granting by implication, or otherwise, any license or right to use any trademark displayed without the written permission of the owner. 17 Look through the windscreen instead of the rear-view mirror Image source: millenniumautoglazing.co.uk 18 9

10 Thank you Q&A 19 Important Information This presentation ( Presentation ) has been produced by Magellan Asset Management Limited ( Magellan ) ABN , AFS Licence No and has been prepared for informational and discussion purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any security or financial product or service. Any such offer or solicitation shall be made only pursuant to a Product Disclosure Statement, Information Memorandum or other offer document (collectively Offer Document ) relating to a Magellan financial product or service. A copy of the relevant Offer Document relating to a Magellan product or service may be obtained by calling Magellan on or by visiting This Presentation does not constitute a part of any Offer Document issued by Magellan. The information contained in this Presentation may not be reproduced, used or disclosed, in whole or in part, without the prior written consent of Magellan. Past performance is not necessarily indicative of future results and no person guarantees the performance of any Magellan financial product or service or the amount or timing of any return from it. There can be no assurance that a Magellan financial product or service will achieve any targeted returns, that asset allocations will be met or that a Magellan financial product or service will be able to implement its investment strategy and investment approach or achieve its investment objective. Statements contained in this Presentation that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Additionally, this Presentation may contain forward-looking statements. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. Certain economic, market or company information contained herein has been obtained from published sources prepared by third parties. While such sources are believed to be reliable, neither Magellan or any of its respective officers or employees assumes any responsibility for the accuracy or completeness of such information. None of Magellan or any of its respective officers or employees has made any representation or warranty, express or implied, with respect to the correctness, accuracy, reasonableness or completeness of any of the information contained in this and they expressly disclaim any responsibility or liability therefore. No person, including Magellan has any responsibility to update any of the information provided in this Presentation. Neither this Presentation nor the provision of any Offer Document issued by Magellan is, and must not be regarded as, advice or a recommendation or opinion in relation to a Magellan financial product or service, or that an investment in a Magellan financial product or service is suitable for you or any other person. Neither this Presentation nor any Offer Document issued by Magellan takes into account your investment objectives, financial situation and particular needs. In addition to carefully reading the relevant Offer Document issued by Magellan you should, before deciding whether to invest in a Magellan financial product or service, consider the appropriateness of investing or continuing to invest, having regard to your own objectives, financial situation or needs. Magellan strongly recommends that you obtain independent financial, legal and taxation advice before deciding whether to invest in a Magellan financial product or service. Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. Nothing contained herein should be construed as granting by implication, or otherwise, any license or right to use any trademark displayed without the written permission of the owner

11 About the Association The Association is an independent organisation focussed on informing, educating, empowering and advocating for all Australians who self manage their superannuation. We believe that every Australian has the right to control their own destiny, and to create a good quality of life in retirement. Further to that, we believe better outcomes arise when professional advisors and trustees are armed with the best and latest information, especially in the growing and sometimes complex world of s. Disclaimer This presentation is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The presentation has been prepared without taking into account any personal objectives, financial situation or needs It does not contain and is not to be taken as containing any securities advice or securities recommendation. Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional advice. Actions, reactions and interpretations cannot be relied upon. The presentation is purely the opinion of the presenter on the day and this presentation is record of that opinion. This presentation was accompanied by an oral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author Association Pty Ltd 21 11