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A really tough decade!. This could well be a very tough investment climate Think ‘wealth preservation’ BEFORE ‘wealth creation’ Think carefully about products, assets and managers you use Demand better products from providers Demand better service from providers and researchers.

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A really tough decade!

  • This could well be a very tough investment climate
  • Think ‘wealth preservation’ BEFORE ‘wealth creation’
  • Think carefully about products, assets and managers you use
  • Demand better products from providers
  • Demand better service from providers and researchers

Some scary stuff out there…

  • Insiders selling 34 shares for every 1 they buy.
  • 80% of return from equities since 1982 through valuation expansion
  • Nations involved in a zero sum game of competititve devaluations
  • Never has the US market been higher ten years later with p/e’s at current levels
  • US trade deficit is $500m a day and is funded by purchases of US treasury bills by overseas countries!
  • Breakdown of trade talks hailed by some as a ‘victory’!
  • Think Osama Bin Laden is really finished ?

Manage risk not return

  • Model portfolios are based on expected returns
  • However this assumes unlimited capital invested indefinitely
  • Clients HATE losses and their impact is not linear
  • Expected return thus fallacy with impact on portfolio construction
  • Therefore you should manage risk because you cannot manage return
  • Risk management involves balancing the investment opportunities with the probability of capital depreciation
  • Who is better placed to manage risk – asset allocator or manager?
  • Tactical asset allocation a waste of time ?

Absolute return approach with low degree of specialisation

Relative return approach with high degree of specialisation

Absolute return approach with high degree of specialisation

The return of the specialist

Paradigm shift

The manager has a mandate to balance investment opportunity with capital at risk.


Traditional portfolio in trouble ?

  • Cash – basically returning zero after inflation and tax
  • Shares – are they expensive or cheap
  • Fixed interest – interest rates at 40 year lows
  • Property – liquidity and fear driven boom

Portfolio additions

  • Structured products – get exposure to index but also capital protection. Need watch participation levels
  • Infrastructure funds
  • Private equity – talented managers heading for private companies from public ones
  • Absolute return – can provide return in area of expertise regardless of direction of general market
  • Commodities – see below

Liontamer product ideas

  • Reverse convertible
    • Return is fixed, capital at risk
    • Higher returning annuity
    • Pricing up well only on single stocks, not indices
  • Capital protected Asian fund
    • Engine room of world growth
    • Cheap prices relative to other developed markets
    • Volatility an issue
    • Difficult place to invest directly

Liontamer product ideas

  • Capital Protected Commodities Fund
    • Full Goldman Sachs Commodity Index
    • 3 year term
    • 100% upside
    • Capital protected unless it falls by 30% then capital at risk
  • Why Commodities?
    • Counter-cyclical to bonds and stocks
    • Equity like returns (GSCI has done 11%pa since 1970)
    • Inflation hedge

Commodities poised for bull market ?

  • Zero allocation to commodities by institutions
  • Virtually no one uses resources funds despite stellar performance in 80’s
  • Real prices at 20 year lows
  • If you continue to print more dollars/yen/euro then prices of hard commodities will rise
  • Dearth of capital investment in recent years

EASYgrow 85

  • Linked to MSCI World Index
  • 8 years
  • 100% protected at maturity
  • 85% growth in the index above 8%
  • 1% annual income
  • Tax efficient via the Australian Unit Trust structure
  • No annual management fee for clients to pay
  • 2% brokerage priced into the terms + up to 3% entry fee
  • Opening Date: 12 November, 2003
  • Closing Date: 16 November, 2004

SUPERgrow 150

  • Same standard features as our EASYgrow product:
  • MSCI, 8 years, tax efficient, 1% annual income, 2% brokerage + up to 3% entry fee
  • The SUPER feature
  • Upside gearing: 1.5 times the rise in the market (above 8%)
  • Ability to double your money: maximum 100% return
  • Partial downside protection: the market can fall by up to 40% from start level and clients’ money stays fully protected at maturity

Heading Goes Here

Disclaimer: Liontamer Investment Management Pty Limited makes every effort to check the accuracy of information in this presentation. Opinions are reasonably held at the time of publication.  However, no responsibility can be taken for any error or omission at the time of publication or due to subsequent changes occurring.  This presentation is for information purposes only and is intended for professional advisers, not private investors. It is not intended for personal investment advice or a recommendation to invest.  Advisers and investors should read the Liontamer investment statement and/or prospectus carefully and satisfy themselves that investments referred to are appropriate for their circumstances and portfolio.  Past performance should not be used as a guide to future performance.  Information about taxation of Liontamer investments does not constitute taxation advice to individual investors and is indicative of the likely tax treatment only. Liontamer is not responsible for any changes in tax law or interpretation which might adversely affect the returns for investors.  Investors should consult their tax adviser on the tax implications of investing, with regards to their specific circumstances. 

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Thank you…