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VENTURA INVESTMENT PROGRAM SEARCHING FOR EXCELLENCE ACROSS ALL ASSET CLASSES

VENTURA INVESTMENT PROGRAM SEARCHING FOR EXCELLENCE ACROSS ALL ASSET CLASSES. THE PROPOSITION. INVESTMENT RESEARCH & SELECTION PORTFOLIO CONSTRUCTION INVESTMENT MONITORING PORTFOLIO RE-BALANCING TRANSITION MANAGEMENT (CGT). Russell Investment Group. Pioneered multi-manager investing

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VENTURA INVESTMENT PROGRAM SEARCHING FOR EXCELLENCE ACROSS ALL ASSET CLASSES

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  1. VENTURA INVESTMENT PROGRAMSEARCHING FOR EXCELLENCE ACROSS ALL ASSET CLASSES

  2. THE PROPOSITION • INVESTMENT RESEARCH & SELECTION • PORTFOLIO CONSTRUCTION • INVESTMENT MONITORING • PORTFOLIO RE-BALANCING • TRANSITION MANAGEMENT (CGT)

  3. Russell Investment Group • Pioneered multi-manager investing • Largest multi-manager in the world ($2.5 trillion under advice) • Largest manager research firm in the world ($40m in 2006) • 2,000 institutional clients • 40 million individual investors • 44 countries • Transitioned over $646b between managers in 2006

  4. CLIENTS • $10,000,000,000 OF BILL & MELINDA GATES FOUNDATION MONEY • 9 OUT OF TOP 10 AUSTRALIAN SUPERANNUATION OUTSOURCING MANDATES AWARDED TO RUSSELL. • BHP,BLUESCOPE STEEL,ANZ,IBM,HOLDEN,NEWS LIMITED,CSR,NESTLE, 3M.

  5. DIVERSIFICATION • MULTI ASSET (EQUITIES, FIXED INTEREST, PROPERTY) • MULTI STYLE (GROWTH, VALUE, STRATEGIC, TACTICAL) • MULTI MANAGER (39 OF THE WORLDS BEST PRODUCTS CHOSEN FROM A RESEARCHED UNIVERSE OF 8,000)

  6. Ventura Philosophy Cash Bonds Property Shares Multi-Asset Value Growth Market Manager 1 Manager 2 Manager 3 Multi-Style Multi-Manager

  7. Ventura Process PEOPLE • PROCESS • PORTFOLIO • PERFORMANCE 14,000 Total manager products monitored by Russell Investment products continually monitored and researched 4,500 Products with a primary “Buy” rating 600 Russell investment manager products 39

  8. Ventura PhilosophyMULTI STYLE Medium Pace Symonds Fast McGrath Spin Warne No single investment style consistently dominates Based on wickets taken in backyard cricket over a rolling 3 year time period – past performance is not an indication of future performance

  9. Ventura PhilosophyMULTI MANAGER

  10. CHASING PERFORMANCE IS A DANGEROUS PASTIME. • MORNINGSTAR STUDY 3/5/2007 • ONLY 22% OF FUNDS WHICH APPEARED AMONG THE • TOP FIVE YEAR PERFORMERS ONE YEAR REPEATED • THIS RESULT THE FOLLOWING YEAR. • 32% TURNOVER AUS EQUITY MGRS IN 2007

  11. Ventura PhilosophyMULTI MANAGER 21 9 6 2 2004 2005 2006 2007 Of the 21 first quartile managers in 2004, two stayed on top each year Ranking from Mercer IDPS Diversified Australian Shares Universe 12 month returns ending 31 January

  12. Monitoring managers • DAILY- REVIEW OF PORTFOLIOS VS PERFORMANCE • WEEKLY- CONVERSATIONS WITH MANAGERS ON TACTICS, MARKETS. • MONTHLY- PERFORMANCE MEASUREMENT • QUARTERLY-FORMAL REVIEW OF PERFORMANCE AND PROCESS.

  13. PORTFOLIO RE-BALANCING • STRATEGY TO REDUCE TRACKING ERROR AT THE LOWEST COST. • FUNDS ARE REBALANCED TO A 3% TOLERANCE LEVEL. • REBALANCED AT ASSET CLASS LEVEL AND MANAGER LEVEL.

  14. TERMINATION • CHANGE IN STYLE • PERFORMANCE BELOW EXPECTATION • DEPARTURE OF KEY MEMBERS OF INVESTMENT TEAM (32% left in 2007) • TRANSITION MANAGEMENT (TAX ADVANTAGED)

  15. TWO TYPES OF RISK • THAT THEIR INVESTMENT WILL LOSE MONEY. • THAT THEIR INVESTMENT WONT MAKE ENOUGH MONEY.

  16. NO NASTY SURPRISES • VENTURA CAPITAL STABLE 30/70 • FIVE YEAR PERFORMANCE 7.56% • VENTURA DIVERSIFIED 50 50/50 • FIVE YEAR PERFORMANCE 9.42% • VENTURA GROWTH 70 70/30 • FIVE YEAR PERFORMANCE 11.72%

  17. Comparable returns to peersMercer Wholesale Australian Shares (Long) Universe Ventura Australian Shares FundTotal return 12mths to 31 Aug 2007 83 long wholesale Australian share funds Data Source: Mercer Wholesale Manager Performance Analytics. Returns are gross of fees.

  18. Ventura a lower risk solutionMercer Wholesale Australian Shares (Long) Universe Ventura Australian Shares FundTracking Error 12mths to 31 Aug 2007 Higher risk Lower risk

  19. ‘PICK YOUR OWN’ • VENTURA AUSTRALIAN SHARES FUND • VENTURA AUSTRALIAN OPPORTUNITIES FUND • VENTURA INTERNATIONAL SHARES FUND • VENTURA GLOBAL OPPORTUNITIES FUND • VENTURA HIGH GROWTH FUND

  20. CORE & SATELLITE • CORE OF VENTURA PORTFOLIOS • USE AN INVESTMENT STRATEGY THAT INCREASES DEGREE OF PREDICTABILITY-NOT ONE WHICH FLUCTUATES WITH MARKET CYCLES. • MODEL PORTFOLIO EXAMPLES AVAILABLE.

  21. SUPPORT • DEDICATED BDM • RUSSELL BDM’S. • SEMINAR SUPPORT • MONTHLY MARKET BAROMETER • INVESTMENT MANAGER OUTLOOK • MARKET REVIEWS • EDUCATIONAL TOOLS FOR CLIENTS • EASY TO USE WEBSITE

  22. BUSINESS OUTCOME • REDUCED MANAGER RESEARCH • REDUCED ADMINISTRATION • REDUCED COMPLIANCE BURDEN • PROFESSIONAL ADVICE • MORE TIME SPENT ON REVENUE GENERATING ACTIVITY WITH CLIENTS & REFERRAL SOURCES

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