• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Liberty2012
 

Liberty2012

on

  • 790 views

 

Statistics

Views

Total Views
790
Views on SlideShare
735
Embed Views
55

Actions

Likes
0
Downloads
2
Comments
0

1 Embed 55

http://jujo00obo2o234ungd3t8qjfcjrs3o6k-a-sites-opensocial.googleusercontent.com 55

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Liberty2012 Liberty2012 Presentation Transcript

    • Liberty’s Investments Senate Group Juan JacobsPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Agenda 1. Excelsior Property Update 2. Retirement Positioning 3. Flexible Investment Plan Focus 4. Budget OverviewPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • 2011 REVIEW OF THE LIBERTY BALANCED PROPERTY PORTFOLIOPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Return Components of 2011 25 20 15 Capital Income 10 Total 5 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Capital: 3.62% Income: 6.89% Total: 10.51% Direct Property: 10.74% Non Direct Property: 8.91%PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • LBPP vs. CPI 25.00 CPI 20.00 Yr Average Return 2006 4.63 19.95 15.00 2007 7.08 20.60 10.00 2008 11.30 14.93 2009 6.30 11.49 5.00 2010 4.29 11.91 0.00 2011 4.98 10.51 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 CPI AVERAGE FOR YEAR LIBERTY PROPERTIES GROSS RETURN Reflection of consistent, inflation beating returns over the long termPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Asset Class Performance 2011 South Africa % Equities (ALSI) 2.6 Bonds (ALBI) 8.8 Cash 5.5 Listed Property (SAPY) 8.9 LBPP 10.5 International Property Total Returns % Americas 7.8 Asia -17.0 Europe -11.3 Oceania -1.3 Source: Inet, Stanlib, Avior ResearchPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Prospects for 2012 § Interim bonus 8.0% gross § Economic recovery still fragile § Cash drag § Net income reasonably certain § Growth on net income constrained due to high escalating operating costs § Focus to reduce costs in the portfolio by use of technology and enforce more discipline in cost management § Risky to forecast capital movement § No big developments being completed for 2012 and re rating on assets are unlikely § Embarked on an investigative process of acquiring / developing assets not currently in the portfolioPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • FUND COMPOSITION AND ATTRIBUTESPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Fund Composition as at January 2012 Eastern Cape Gauteng Retail Kwa-Zulu Natal Western Cape Offices 5% 8% 9% 5% 1% 8% Hotels 11% Other Fixed Property 10% 65% 78% Listed Property and property linked assets Money Market/ Cash Type InstrumentsPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Sandton City Extension and Refurbishment The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, you may hav e to delete the image and then ins § 30 000 m² retail extension completed and opened for trading in early November 2011 § Many International Brands launching for the first time in Africa at Sandton City § 900 new parking bays § Enabling work for subsequent phases § Due to the construction industry slump, new The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again. tenders have been granted in favour of Liberty Properties The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, you may hav e to delete the image and then ins § Refurbishment plans underway for Sandton Offices and Parking deck § 100% letPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Liberty Midlands Mall Lifestyle Centre § Likely tenants: § Toys R Us § Wetherleys § Builders warehouse § Hi Fi Corporation § Coricraft § Furncity § Golfers Club § Pre- let § 80% pre-let conditions need to be achieved before commencing developmentPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Retirement PositioningPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Retirement Provision – Looking at it differently Why is an RA one of the best ever products for Retirement? • Inaccessibility • Protect your investment from temptation • Protect it from creditors • Portability • Not dependent on employer or employer benefits • Tax Benefits o SARS is currently paying up to 40% of contributions o While invested, the returns are tax free. o Withdrawals on lump sums enjoy preferential tax treatment. o Annuity income post retirement exempt § Tax Threshold R59 750p.a. < 65, R93 150 p.a. < 75, R104 150 ≥ 75 o When you die, RAs fall outside of the estate duty calculation. 13PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Why Liberty? • Competitive RIY – not reliant on “bells and whistles” • Wide range of portfolio guarantees (from conservative to aggressive) • Higher of death guarantee • Retrenchment premium waiver unique to Liberty Investments • Disability Premium Waiver • Maternity premium holiday on retirement builder • On RA’s there is a premium holiday benefit • The policy bonus is not performance related or fund specific (applies to paid up policies) • Cost neutral commission structure • Reducing management feePDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Who will benefit from the Flexible Investment Plan? A client who wants the flexibility to address different needs in one investment A client who wants the benefit of compounding growth A client who wants funds to be paid out quickly to beneficiaries should they pass on A client who wants low ongoing fees A client who might need multiple access to funds A client who likes our higher of death guarantee A client who may need guaranteed portfolios A client who would like a lump sum, free of additional tax (if original owner), at the end of five years A client who requires emergency access to funds A client who does not want to incur any early termination chargesPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, you may hav e to delete the image and then ins What is Bundling? Up to 10 policies One policy document – Separate schedule per policy Each policy independent: – Initial consideration – Upfront Advisory fees – Ongoing Commission – Portfolios – Lives assured – Servicing requests – Cessions – Surrenders/ AdvancesPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Single Premium Endowment Comparison: Excelsior Moderate & LA Excelsior Moderate (Inv Builder) with 3% IAF Investment Single Multi Acc Multi Acc Plan Flexible Premium Inv Plan Inv Plan Early Investment Reduced Fees termination Investment Potential Potential charges apply Plan Secondary CGT Secondary CGT on these funds Builder (1st 4 years) if selected on MAIP: Consideration R 1,000,000 R 1,000,000 R 1,000,000 R 1,000,000 R 1,000,000 Income Fund, Net Allocation R 995,739 R 965,800 R 965,800 R 965,800 R 965,800 Bond Fund, High Yield & Allocation Money Market +R 29,940 R0 R0 R0 R0 Enhancement NB!! Be Initial advisory R 34,200 R 34,200 R 34,200 R 34,200 R 34,200 cautious about fee (plus VAT) selecting Initially Money Market 1.23% pa 1.96%p.a. in as client will Management reducing 1st 5yrs, and compare to 1.92% pa 1.92% pa 1.2% pa fee based on reduces bank where no growth thereafter fees are levied achieved and there is still RIY at Year 5 the impact of 2.2% 2.1% 2.3% 2.8% 2.1% secondary CGT RIY at Year 10 2.1% 1.7% 2.0% 2.5% 1.7%PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Guaranteed Portfolios Growth Investment SeriesPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Growth Investment Series Capital (C) Guarantee OptionPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Growth Investment Series Capital Plus (C+) Guarantee OptionPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • The case for Multi-Manager Consistency Investors are more likely to achieve their objectives if portfolios are structured to deliver consistent performance. Diversification Portfolios using multiple managers with complementary approaches diversify risk and have the ability to generate more consistent results — therefore greater potential success for the investor. Process Successful investment results from an ongoing, disciplined process that requires regular monitoring and periodic corrective action as conditions change through cycles. 1st Quartile Single Manager volatility More consistent Multi Manager returns Rank 4th Quartile Time àPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Excelsior Multi-Manager Risk Profiled Portfolios 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Conservative Moderate Moderate Moderate Aggressive Aggressive Conservative Equity Excluding Property Listed Property Bonds Cash Equity Building Property Bond Building Cash Building Allocation Allocation Allocation Allocation Block Building Block Block Block Afena Equity 10.5% Cash 1.4% Cash 1.3% Taquanta 30.5% AG Equity 14.4% Catalyst 34.3% Cadiz 29.7% OMIGSA 30.4% Cash 0.4% Prudential 20.0% Coronation 30.7% Prescient 39.1% Coron. Equity 20.2% STANLIB 44.3% Prescient 38.3% Foord Equity 15.0% Element Earth 10.1% Kagiso 14.8% Oasis Equity 14.6%PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • The hidden cost of going external Ongoing Foreign Product Guarantee Commission Currency Asset Total Ongoing Portfolio Management Fee Recovery Management Manager Fee Fees Fee* Fee Fee 1.83% p.a. Excelsior Multi- Manager 1.23% p.a. n/a n/a n/a 0.60% p.a. No additional Aggressive performance fees levied 1.71% p.a. 2.94% p.a. (Fee at benchmark) Fund Xternal 1.23% p.a. n/a n/a n/a Max 3.42% p.a. Max 4.65% p.a. Management fee = effective tiered management fee at inception based on a R1m investment with 2+ policies in the bundle and a 3% initial advisory fee (excl. VAT) Source :LibertyPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Reduction in Yield versus Total Expense Ratio Reduction in Yield (RIY) Total Expense Ratio (TER) High vs. Low Ratio not necessarily expensive or cheap! High Figure = relatively expensive. Actively managed funds have higher figures than Low Figure = relatively cost effective. passively managed funds – performance may be better thus outweighing costs! Large funds have economies of scale thus TER relatively low but performance may be poor relative to peers. Looks forward over policy term. Historic view – calculates cost over previous year thus not an indication of future costs. Calculated over the term of the policy. Only calculated over 1 year. All costs to policyholder including upfront costs included in calculation. Not all costs included e.g. Upfront costs and advisory fees not included, however most recent performance fees Performance fee not included. Liberty includes included in ratio. fee at benchmark as per CPQ. Simple, easy to understand comparison tool. Fairly simple figure but must be used with caution as a comparison tool.PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • How to Calculate a LISP’s “Reduction in Yield” Reduction in Yield vs. Total Expense Ratio Converting Total Expenses on a LISP quote to a FIVE YEAR RIY Example based on above LISP Total Weighted Fee*: Take 1.90% p.a. + (Initial advisory fee of 3% + Vat = 3.42% / 4 ) =1.9% p.a. + (3.42% / 4) p.a. =1.9% p.a. + 0.86% p.a. = Approximate RIY of 2.76% p.a. at YEAR 5 on LISP (True RIY is 2.82% p.a.)PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Budget 2012PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • BUDGET 2012 “Our development requires every one of us to ask – what can I do for my country, my people, our future!” Pravin Gordhan, Budget Speech, 22 February 2012PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Interest and Foreign Dividend Exemption 2012 2013 Interest income under 65s R22 800 Unchanged Interest income over 65s R33 000 Unchanged Foreign dividends R3 700 UnchangedPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Dividend Withholding Tax • STC to be replaced by a Dividend Withholding Tax – Effective date: 1 April 2012 • DWT rate – 15% (SA corporates and retirement funds are exempt) • DWT will bring SA in line with international best practice and is expected to make SA more investor-friendly • Corporate tax rate in SA is now simplified at a maximum of 28%PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Capital Gains Tax 2012 2013 Inclusion Rates: Individuals and Special Trusts 25% 33.3% Companies and Other Trusts 50% 66.6% Effective Rates: Effective rate (individuals & ST) 10% max 13.3% max Companies 14% 18.65% Trusts 20% 26.64% Exclusions: Individuals (annual) R20 000 R30 000 Deceased estates R200 000 R300 000 Primary Residence R1.5m R2mPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Medical Tax Credit • As from 1 March 2012 medical contributions will be subject to a tax credit as opposed to a tax deduction • The monthly tax credit is R216 for the member and spouse and, R144 for each dependent • Definition of dependent has been extended, now includes: spouse, child of a spouse, immediate family members for whom you are liablePDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Medical Tax CreditPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Medical Expenses Deductions – S.18 Disabled persons Under 65’s The medical deduction comprises: The medical deduction comprises the amount by which the aggregate of…. Medical scheme contributions Medical scheme contributions exceeding (4 x medical scheme exceeding (4 x medical scheme credits) credits) + + All other medical expenditure All other medical expenditure …..exceeds 7.5% of taxable incomePDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Social Security 2012 2013 Disability and Old Age Grants R1 140 R1 200 Old Age Grants – over 75 R1 160 R1 220 Child Support Grants R 265 R 280PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Proposal • Tax-preferred savings and investment accounts – Government intends to introduce tax-preferred savings and investment vehicles by April 2014. Returns generated in these savings products, such as interest, capital gains and dividends will be tax exempt. Withdrawals from such vehicles will also be tax exempt. Aggregate annual contributions will be limited to R30 000, with a lifetime limit of R500 000. – A discussion document will be published by May 2012, and it remains to be seen whether private institutions will be able to offer such vehicles to the public.PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Questions? QuestionsPDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Thank you !PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com
    • Disclaimer In formulating the information in this document, Liberty Life has taken due care to ensure that the views and opinions are based on information which is relevant and accurate. While every care has been taken before opinions and views are given, no representation, warranty or undertaking (expressed or implied) is given and no responsibility or liability is accepted by Liberty Life as to the accuracy of the information contained herein. Any recommendations made must take into account your clients specific needs and personal circumstances. Any legal, technical or product information contained in this document is not to be construed as advice by Liberty Life. Liberty Group Limited – an Authorised Financial Services Provider in terms of FAIS Act (license no. 2409).PDF created with FinePrint pdfFactory Pro trial version http://www.fineprint.com