Futuro Forum | Bowral 2012 Realm Investment – Fixed Interest

1. Futuro Forum | Bowral 2012 Realm Investment – Fixed Interest

2. Realm Investment House Fixed interest – The good, the bad and the ugly. An investment approach

3. What is Fixed Income It is complex What are you missing out on? Very important part of your Asset Allocation

4. What about everything else ADI Deposits Commercial Paper ABCP Paper Deposits Commonwealth State Local Government Debt Secured (RMBS) Secured (Covered) Unsecured Bank Debt Corporate Asset Back (Secured) Unsecured Infrastructure Debt Secured International Debt Government Corporate ABS Fixed Coupon Floating Coupon Indexed Coupon Mezzanine Hybrid

5. Managing Risks Yield Solvency & Liquidity Relativities 8% Term Risk

6. It is Complex! – Term Risk • Fixed Income is about managing cash flows and future Income • Capital preservation with a focus on regular income • The best thing for a fixed income investor is you get your money back

7. Relativities What's Happening

8. Relativities

9. Managing Liquidity & Solvency What's Happening Investment Committee Framework What’s in the Market Asset Selection Portfolio Construction What are we doing about it?

10. Solvency Screening – the Six C’s Character Collateral Capacity Capital Capital Structure Conditions

11. Liquidity Analysis Everything above the line is relatively cheap < ------- Less Risk More Risk ------- > Asset types available from a single Issuer ranked by credit Solvency Risk

12. Portfolio Optimisation

13. Citi Group Economic Surprise index

14. 3 Year Bond vs 10 year Bond Curve

15. Bank Asset vs Local GDP What's Happening What’s in the Market

16. European Debt What's Happening What’s in the Market

17. Australian 3Year Government Bond

18. US Bond Curves

19. Realm Investment House www.realminvestments.com.au Andrew Papageorgiou - Investment Manager Ph: +613 9008 7292 Mob: +61 428 137 366 andrew.p@realminvestments.com.au Robert Camilleri - Investment Manager Ph: +613 9008 7291 Mob: +61 413 096 374 rob.c@realminvestments.com.au Richard Kerr - Investment Manager Ph: +612 8014 4234 Mob: +61 414 557 673 richard.k@realminvestments.com.au

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