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Long-Term Return Assumptions and Expectations Overview

Understand long-term return assumptions and expectations based on real equity, property, bond returns, inflation risk premium, and more. Explore what returns to expect with given assumptions and SIM's current positioning.

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Long-Term Return Assumptions and Expectations Overview

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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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