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Assumptions for Long-term returns: SA - Real

Assumptions for Long-term returns: SA - Real. Equity returns. 7.0%. Equity Risk premium. 4.0%. Property returns. 6.0%. Property premium. 3.0%. Bond returns. 3.0%. 0.5%. Inflation Risk premium. ILB returns. 2.5%. Term premium. 0.5%. Cash returns. 2.0%. 0%. 1%. 2%. 3%. 4%. 5%.

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Assumptions for Long-term returns: SA - Real

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  1. Assumptions for Long-term returns: SA - Real Equity returns 7.0% Equity Risk premium 4.0% Property returns 6.0% Property premium 3.0% Bond returns 3.0% 0.5% Inflation Risk premium ILB returns 2.5% Term premium 0.5% Cash returns 2.0% 0% 1% 2% 3% 4% 5% 6% 7% Source : SIM

  2. CPI+5% (Domestic) What could you expect given these RETURN assumptions Source : SIM

  3. What returns can you expect?

  4. 10 years to 31 May 2012 Source : SIM – ALSI, ALBI, STeFi, J255T (prop), MSCI World, JPM Gbl Bond, 3m USD LIBID

  5. CPI+5% (Domestic) What could you expect given these RETURN assumptions Source : SIM

  6. Portfolio construction

  7. Thank you

  8. SIM’s current positioning 1 March 2011

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