02 The year in review
04 Investment returns to 30 June 2008
26 Asset allocation as at 30 June 2008
53 Investment strategies
56 Important information
59 Financial statements
62 Notes to and forming part of the financial statements
70 Trustee’s statement
71 Independent report by approved auditor to trustee and members
Macquarie Super and Pension Manager (Super and Pension Manager) together with Macquarie Super Accumulator (Super Accumulator) form part of a superannuation fund
known as the Macquarie Superannuation Plan RSE R1004496. The trustee for the superannuation fund is Macquarie Investment Management Limited ABN 66 002 867 003
AFSL 237 492 RSEL L0001281 (MIML, Macquarie, the trustee, we, us).
MIML has appointed Bond Street Custodians Limited (BSCL) ABN 57 008 607 065 AFSL 237 489 to hold the fund’s investments in custody. BSCL and MIML are wholly owned
subsidiaries of Macquarie Bank Limited ABN 46 008 583 542.
MIML is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, and MIML’s obligations do not represent deposits or other
liabilities of Macquarie Bank Limited. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIML.
Investments in Super and Pension Manager and Super Accumulator are not deposits with or other liabilities of Macquarie Bank Limited or of any Macquarie Group
company, and are subject to investment risk, including possible delays in repayment and loss of income or principal invested. Neither Macquarie Bank Limited, MIML,
Macquarie Life Limited ABN 56 003 963 773 AFSL 237 497, Macquarie Equities Limited ABN 41 002 574 923, any other investment managers referred to in this annual
report, nor any other member company of the Macquarie Group guarantees the performance of Super and Pension Manager or Super Accumulator or the repayment
of capital from Super and Pension Manager or Super Accumulator.
The information contained in this annual report is dated 22 December 2008 and is general information only. We have not taken into account your objectives, financial situation or
needs. You should consider the appropriateness of this information, taking into account your objectives, financial situation and needs and the applicable PDS available from us or
your adviser, before acting on any of the information in this annual report.
22 December 2008
Welcome to the annual report for Super and Pension Manager and Super Accumulator for the year ended 30 June 2008.
The 2007–08 financial year saw the successful implementation of the Government’s Better Super reforms. Key among the
changes were new limits on the amount of contributions you can make, tax free benefits after reaching the age of 60 and
modified pension payment rules.
It has also proven to be an extraordinary year in a number of ways. The pace of change in the outlook for growth, commodity
prices, equity markets, interest rates and government policy has been so dramatic that even the most astute analysts and
investors have been barely able to keep up.
Given the amazing developments of the past couple of months, it is easy to forget there has been not one but two once in a
lifetime phenomena in 2008. The first half of the year was characterised by an incredible divergence between the fortunes of
credit and commodity markets, followed by the fallout in financial markets from the subprime mortgage debacle that gained
increasing traction in early 2008.
To help you make sense of the year’s events, we have included ‘The year in review’ section on the following pages.
If you have any questions about this annual report, Super and Pension Manager or Super Accumulator in general, please contact
Macquarie Investment Management Limited
This annual report includes information on:
Super Manager ■■ and Super Accumulator, accumulation superannuation products
Pension Manager■■ , a retirement income solution incorporating an account based pension and Term Allocated Pension.
References to Pension Manager can be interpreted as references to both Pension Manager and Term Allocated
The financial statements relate to the entire Macquarie Superannuation Plan which includes Macquarie Super and Pension
Manager, Macquarie Super Accumulator, Macquarie SuperOptions and FutureWise Super – a risk only superannuation fund.
The sub-prime market collapse in the US, the subsequent global
credit crunch and surging oil prices have all impacted market
conditions. In some cases, financial markets have fallen by more
It is important to note that the events in financial markets over
the past few months are not unusual. Just like economic cycles,
financial markets are cyclical and are susceptible to economic
downturns and bouts of speculation. Investing in financial markets
should be viewed as a long-term investment and fluctuations in
asset prices are part of the normal economic cycle.
Understanding market volatility
Many people believe investing is about ‘timing the market’ –
getting in before prices rise, enjoying the ride up and then getting
out before prices fall.
Yet anticipating these market moves can be extremely difficult
because no two market cycles are the same. Investors’ emotions
make successful market timing even harder. While logic suggests
the best time to buy is when asset prices are cheap or falling,
many investors tend to buy when prices are rising and sell when
they are falling.
The emotions of fear and greed can lead us to buy and sell at
exactly the wrong times.
As an investor, you must allow time for the rises and falls of the
market to take their course. The main message from investment
experts is that it is better to buy and hold rather than trying to time
the market. As the cliché says “It’s time not timing that counts”.
All investments involve risk. However, it is important to distinguish
between an investment which is volatile in the short-term but may
achieve strong long-term gains, and assets of such poor quality they
can never be anything but a bad investment.
The global economic outlook
Global growth has been exceptionally strong over the past few years
and this is partly the reason why the world economy is currently facing
some serious challenges.
The housing market collapse in the US, the credit crunch, higher
oil prices, higher commodity prices, and the persistence of global
imbalances are shaping the 2008 economic landscape.
The slowdown in the US is perhaps the key reason why global growth
has been revised lower. GDP growth is expected to soften in 2008 –
2009, before lifting to an above trend pace of 2.2% in 2010.
Growth in emerging economies such as China and India are set to
remain robust, and are forecast to grow by 9.3% and 7.9% in 2008.
Australian economic outlook
The Australian economy confounded the pessimists in the March
quarter, growing by a reasonable 3.6% (annual average). While this
was stronger than expected, it does not alter the impression that the
Reserve Bank of Australia (RBA) has succeeded in slowing growth.
Not only was growth stronger than expected, but it also proved to
be broadly based. Despite very weak retail spending, household
consumption grew by 0.7% and business investment was up 1.5%.
Public investment was also up 5.9%. Even new housing construction
managed to rise by 0.5%.
While the expenditure measure of GDP only increased 0.2%, the
production measure of the economy was a lot stronger, rising by 1.0%.
The year in review
Are you concerned about your super?
World War 1.
War priorities and
shortage of imports
restricts industrial activity.
1936-40 European war scare.
Wool prices fall. Brief economic
recession and slow transition to
1939 Start of
World War II.
1940 fall of France.
1941 Pearl Harbour.
USA enters war.
investment, scrip shortage
and property boom.
Oil, gas and
Iron ore and
OPEC oil crisis.
weak. $A fall
Cold War ends.
CBD property crash hits banks.