Investment performance to 30 June 2008

Date of publication: 31 July 2008

Continued volatility in global investment markets has meant that some UniSuper members may be experiencing negative investment returns for the first time in five years.

Everyday there seems to be another story in the media about stock market downturns, and we recognise that front-page newspaper headlines like “Super savings savaged” aren’t helping to ease the concerns of many of our members.

While there’s no doubt that superannuation funds around Australia are feeling the impact, it’s good to know that UniSuper’s investment options have continued to provide strong long-term returns for our members and that we continue to outperform many of our competitors.

Here’s how UniSuper’s investment options have performed to 30 June 2008.

UniSuper's investment option performance to 30 June 2008

The impact that recent market volatility has had on your super account will depend on your chosen investment option/s.

While some of UniSuper’s investment options recorded negative returns for the 2007/08 financial year, UniSuper’s investment performance relative to benchmark remained favourable. Indeed our High Growth, Growth and Balanced options comfortably exceeded their respective benchmarks.

As superannuation is a long-term investment, it’s important to look beyond the financial year returns and understand how your investment options have performed over the 3, 5 and 7 year periods.

The tables below show the returns of UniSuper’s Pre-Mixed investment options for the past financial year, as well as the medium to long-term returns, compared to their relative benchmarks and Mercer medians.

Investment returns for the financial year ending 30 June 2008 (after tax and fees)

The past performance of an investment option should not be relied upon as an indicator of future performance.

Medium to long-term investment returns (after tax and fees)

The past performance of an investment option should not be relied upon as an indicator of future performance.

As you can see, although UniSuper’s recent investment option returns may seem lower than those you may have experienced since 2004, performance over the longer-term has remained strong.

With the exception of UniSuper’s Socially Responsible High Growth option, UniSuper has outperformed each of its respective benchmarks and survey medians over the 3 to 7-year periods.

Many UniSuper members are invested in our Balanced investment option, so it is pleasing to know that this option has not only achieved a 10.2%p.a. compound average return over the 5 year period, but it has also performed stronger than the benchmark and survey median throughout all periods. And in spite of the downturn in the global financial markets over the past financial year, UniSuper’s Balanced option outperformed its benchmark by almost 0.94% and its survey median by 3.32%.

How does UniSuper's performance compare to other super funds?

Industry research agency, SuperRatings, recently released a survey which details the investment returns of major Australian super funds and ranks them on their relative performance.

The results of their June 2008 survey has shown that UniSuper has performed strongly in comparison to its peers for the financial year ending 30 June 2008, and over the longer 3, 5 and 7 year periods.

The table below shows you how UniSuper’s investment options have been ranked in comparison to other Australian super funds over the long term.

Long-term investment returns and relative SuperRatings ranking (after taxes and fees)

The past performance of an investment option should not be relied upon as an indicator of future performance.

The High Growth, Growth, Balanced, Conservative Balanced and Capital Stable options all outperformed their respective SuperRatings survey medians and ranked in the top 25% or 50% of funds rated for the 2007/08 financial year.

Long-term relative performance was also very favourable with most investment options exceeding their respective medians over both the 3 and 5-year periods, and ranking in either the top 25% or 50% of funds rated by the survey over both periods.

Performance over the 5 year period ending 30 June 2008 was especially pleasing with the High Growth, Growth, Conservative Balanced and Cash options ranking in the top 10 funds, and the High Growth option ranking 1^st out of 35 funds. These options also ranked in the top 10 funds over the 7 year period, although in some cases the universe sizes over this 7 year period was relatively limited.

Don't sweat in the short term

So, while short-term investment returns for the 2007/08 financial year have unfortunately been affected by the global downturn and subsequent poor investment market performance, the results show that overall UniSuper continues to perform strongly over medium and long-term periods, both in absolute terms and when compared to other super funds.

We understand that negative investment returns are always of concern, but urge you to remember that market volatility is normal and drops in performance are usually followed by a longer recovery and growth cycle. As always, the key is not to focus on short-term ups and downs in the market, but look to the bigger picture.

While the temptation to switch to a ‘safer’ investment option might seem appealing, you may simply end up consolidating your losses and miss out in the longer term.

For more information about the recent investment market volatility and how your investments have performed go to:

• 2008 proves a challenging investment year
• historical investment performance

Notes:

UniSuper’s Socially Responsible Balanced investment option was introduced on 1 January 2008, so annual investment returns to 30 June are not available.

UniSuper’s single-asset class investment options were introduced on 1 July 2008, so investment returns to 30 June 2008 are not available.

SuperRatings does not review socially responsible investment options so the performance and relative ranking of UniSuper’s Socially Responsible High Growth and Socially Responsible Balanced options are not available.

The return of the benchmark refers to the combined market returns of each asset sector included in the portfolio, as measured by its recognised market Index. Survey medians are provided in Mercer Investment Consulting performance surveys. For more information read Investing for the future.

Disclaimer:

This information is general information only and is not intended to be advice. It has been prepared without taking account of your objectives, financial situation or needs. Before deciding to acquire or hold an interest in any UniSuper product, you should consider whether it is appropriate for you and consider the relevant product disclosure document, which is available from your employer or UniSuper.

Issued by: UniSuper Management Pty Ltd ABN 91 006 961 799 Australian Financial Services Licence No. 235907 Level 37, 385 Bourke Street, Melbourne VIC 3000 UniSuper Helpline: 1800 331 685.

For more information about ratings, contact SuperRatings Pty Ltd ABN 95 100 192 283 at www.superratings.com.au.