Real and nominal returns by asset class

1900-2009

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Important information

Investments that are volatile in the short term... Returns above inflation over 1 year periods (1900 - 2009)

-60%

-40%

-20%

0%

20%

40%

60%

80%

1900

1905

1910

1915

1920

1925

1930

1935

1940

1945

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

Period ended 31 December

% p

a

Australian shares Australian debt securities Australian cash

Source: Calculated by MLC using data presented in DMS Data Module offered through the Morningstar software program EnCorr. Based on copyrighted books by Dimson, Marsh, and Staunton, Triumph of the Optimists, Princeton University Press, (c) 2002, and Global Investment Returns Yearbook 2003, ABN AMRO/London Business School (c) 2003. All rights reserved. Used with permission.

…have produced higher returns over most long periods. Returns above inflation over 20 year periods (1900 - 2009)

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

1920

1925

1930

1935

1940

1945

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

Period ended 31 December

% p

a

Australian shares Australian debt securities Australian cash

Source: Calculated by MLC using data presented in DMS Data Module offered through the Morningstar software program EnCorr. Based on copyrighted books by Dimson, Marsh, and Staunton, Triumph of the Optimists, Princeton University Press, (c) 2002, and Global Investment Returns Yearbook 2003, ABN AMRO/London Business School (c) 2003. All rights reserved. Used with permission.

Annual returns of Australian shares1900 – 2009 (nominal)

Source: Calculated by MLC using data presented in DMS Data Module offered through the Morningstar software program EnCorr. Based on copyrighted books by Dimson, Marsh, and Staunton, Triumph of the Optimists, Princeton University Press, (c) 2002, and Global Investment Returns Yearbook 2003, ABN AMRO/London Business School (c) 2003. All rights reserved. Used with permission.

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%1

90

0

19

05

19

10

19

15

19

20

19

25

19

30

19

35

19

40

19

45

19

50

19

55

19

60

19

65

19

70

19

75

19

80

19

85

19

90

19

95

20

00

20

05

20

10

Year Ending 31 December

Annual returns of global shares ($A hedged)1900 – 2009 (nominal)

Source: Calculated by MLC using data presented in DMS Data Module offered through the Morningstar software program EnCorr. Based on copyrighted books by Dimson, Marsh, and Staunton, Triumph of the Optimists, Princeton University Press, (c) 2002, and Global Investment Returns Yearbook 2003, ABN AMRO/London Business School (c) 2003. All rights reserved. Used with permission.

-50%

-30%

-10%

10%

30%

50%

70%

90%

1900

1905

1910

1915

1920

1925

1930

1935

1940

1945

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

Year ending 31 December

Value of $100 invested for the last 30 years Values shown are above inflation ie "real returns"

$10

$100

$1,000

$10,000

31/12

/197

9

31/12

/198

4

31/12

/198

9

31/12

/199

4

31/12

/199

9

31/12

/200

4

31/12

/200

9

Australian shares $917

Cash $334

Source: Calculated by MLC using data presented in DMS Data Module offered through the Morningstar software program EnCorr. Based on copyrighted books by Dimson, Marsh, and Staunton, Triumph of the Optimists, Princeton University Press, (c) 2002, and Global Investment Returns Yearbook 2003, ABN AMRO/London Business School (c) 2003. All rights reserved. Used with permission.

Value of $100 invested for the last 60 years Values shown are above inflation ie "real returns"

$1

$10

$100

$1,000

$10,000

31/12

/194

9

31/12

/195

4

31/12

/195

9

31/12

/196

4

31/12

/196

9

31/12

/197

4

31/12

/197

9

31/12

/198

4

31/12

/198

9

31/12

/199

4

31/12

/199

9

31/12

/200

4

31/12

/200

9

Australian shares $3,864

Cash $187

Source: Calculated by MLC using data presented in DMS Data Module offered through the Morningstar software program EnCorr. Based on copyrighted books by Dimson, Marsh, and Staunton, Triumph of the Optimists, Princeton University Press, (c) 2002, and Global Investment Returns Yearbook 2003, ABN AMRO/London Business School (c) 2003. All rights reserved. Used with permission.

Value of $100 invested for the last 110 yearsValues shown are above inflation ie "real returns"

$1

$10

$100

$1,000

$10,000

$100,000

$1,000,000

31/12

/189

9

31/12

/190

4

31/12

/190

9

31/12

/191

4

31/12

/191

9

31/12

/192

4

31/12

/192

9

31/12

/193

4

31/12

/193

9

31/12

/194

4

31/12

/194

9

31/12

/195

4

31/12

/195

9

31/12

/196

4

31/12

/196

9

31/12

/197

4

31/12

/197

9

31/12

/198

4

31/12

/198

9

31/12

/199

4

31/12

/199

9

31/12

/200

4

31/12

/200

9

Australian shares $284,408

Cash $209

Source: Calculated by MLC using data presented in DMS Data Module offered through the Morningstar software program EnCorr. Based on copyrighted books by Dimson, Marsh, and Staunton, Triumph of the Optimists, Princeton University Press, (c) 2002, and Global Investment Returns Yearbook 2003, ABN AMRO/London Business School (c) 2003. All rights reserved. Used with permission.