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  • M acquarie S

    uper and P ension M

    anager M

    acquarie S uper A

    ccum ulator

    Macquarie Super and Pension Manager

    Macquarie Super Accumulator Annual report to investors Year ended 30 June 2008

    Macquarie Superannuation Plan Smart administration solutions made simple

    Macquarie Investment Management Limited ABN 66 002 867 003 AFSL 237492 RSEL L0001281

  • Contents 01 Welcome

    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.

  • 1

    Welcome

    22 December 2008

    Dear Investor,

    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 your adviser.

    Yours sincerely,

    Neil Roderick Executive Director

    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 Pension Manager.

    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.

  • 2

    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 than 20%.

    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?

    4,000

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    1,000

    7,000

    500

    50

    Federation

    Boer war ends.

    1914 Start of

    World War 1.

    War priorities and shortage of imports

    restricts industrial activity.

    1920-21 Brief post-war deflation.

    1925 U.K. returns to gold standards.

    1929 Crash. Export prices collapse. Industrial activity falls.

    1930-31 Depreciation of Australian currency. Cheap money policy and premier’s plan.

    1936-40 European war scare. Wool prices fall. Brief economic recession and slow transition to war economy.

    1939 Start of World War II.

    1940 fall of France.

    1941 Pearl Harbour. USA enters war.

    Suez crisis

    Strong overseas investment, scrip shortage and property boom.

    1950 Start of Korean War.

    Credit squeeze.

    Oil, gas and nickel discoveries.

    Iron ore and bauxite developed.

    Industrial and property boom. First labour government since 1949.

    OPEC oil crisis. Inflation, credit squeeze. Property company failures.

    Inflation down, industrials recover, commodities weak. $A fall attracts overseas investors.

    World share price

    collapse. Bank credit fuels

    property boom.

    Cold War ends. CBD property crash hits banks. Major recessi