MLC MasterKey Investment Service Fundamentals
Fund Snapshot
MLC Wholesale IncomeBuilder™
Fund Overview
About the Fund
Key Information
The Fund aims to provide returns from companies that are expected to deliver
a growing dividend stream over time.
APIR Code MLC0264AU
The Fund is expected to generate tax effective returns by:
Status Onsale
Product Size as at 31 May 2014
$245.03M
investing in companies expected to have high franking levels, and
carefully managing the realisation of capital gains.
Commencement Date
22 Jan 1998
You can assess the performance of the Fund against the S&P/ASX 200 All
Industrials Accumulation Index over rolling 4 year periods.
Important Announcements
30 Jun 2013
Indicative Investment Fee
The Indicative Investment Fee for the MLC Wholesale IncomeBuilder Fund was reduced from 0.97% pa to 0.72% pa on
the 1st June 2013. The Indicative Investment Fee shown in the Fund Profile Tool represents an annualised fee and is
calculated using the average Investment Fee for the fund over the past 12 months. Consequently, while the Investment
Fee is 0.72% from the 1st June 2013 the change will not be fully reflected in the Fund Profile Tool until 1 June 2014.
Please accept our apologies for this inconvenience.
Fund Breakdown
By Asset Class as at 30 Jun 2014
The information displayed reflects the actual asset allocation based on the holdings within the fund at the effective date.
Australian Shares 99.2%
Cash 0.6%
Other 0.2%
By Manager as at 30 Jun 2014
Asset Class
Australian Shares
Manager
Percentage
Investment Amount
Antares
30.0%
$2,997
Maple Brown Abbott
69.2%
$6,925
Cash
Cash
0.6%
$60
Other
Other
0.2%
$18
100.0%
$10,000
Total
Page 1 of 5
MLC MasterKey Investment Service Fundamentals
Fund Snapshot
MLC Wholesale IncomeBuilder™
Stock Holdings
Top Stocks for Fund as at 31 May 2014
The Top Stocks for Fund have a one month reporting delay.
Stock Description
Industry
Country
Percentage
Investment Amount
ANZ BANKING GROUP
Financials
Australia
10.2%
$1,025
WESTPAC BANKING CORP
Financials
Australia
9.9%
$986
NATIONAL AUSTRALIA BANK
Financials
Australia
9.3%
$928
TELSTRA CORP
Telecommunication Services
Australia
8.2%
$821
WESFARMERS
Consumer Staples
Australia
6.7%
$674
COMMONWEALTH BANK OF AUSTRALIA
Financials
Australia
5.9%
$594
SUNCORP-METWAY
Financials
Australia
3.5%
$349
AMP
Financials
Australia
3.4%
$336
STOCKLAND TRUST
Real Estate Investment Trusts (REITs)
Australia
3.3%
$325
ASX
Financials
Australia
2.7%
$275
Performance
Historical Performance
Absolute Fund Returns as at 30 Jun 2014
Returns for periods one year or greater are calculated on an annualised basis. All returns are calculated using end of
month redemption prices assuming all distributions are reinvested and are net of management fees which may include
administration fees, issuer fees and investment fees and prior to any individual tax considerations, and do not allow for
initial entry fees.
The returns outlined below represent historical performance only and is not an indication of future performance. The value
of an investment may rise or fall with changes in the market. Returns are calculated in accordance with FSC Standard No
6.
3 month
Fund Performance
6 month
1 Year
3 Years
5 Years
10 Years
Since Inception
22 Jan 1998
2.0%
4.0%
16.3%
15.1%
12.9%
8.1%
8.5%
Growth
-1.0%
-0.1%
9.6%
8.6%
7.3%
2.1%
3.7%
Distribution
3.0%
4.1%
6.7%
6.5%
5.7%
6.0%
4.8%
Page 2 of 5
MLC MasterKey Investment Service Fundamentals
Fund Snapshot
MLC Wholesale IncomeBuilder™
Commentaries
Fund Commentary
As at 30 June 2014
The fund produced a total return of 2.1% (before fees and tax) in the quarter to 30 June 2014. This was 0.8% above the
1.3% return of the S&P/ASX200 All Industrials Accumulation Index. Over the year to 30 June, the index returned 17.1%
and the fund returned 17.1% (before fees and tax), which was 0.3% below the index return.
The profit reporting season that concluded in March 2014 confirmed the Australian market as a whole is on track to
record high single-digit earnings growth for the financial year. The next profit reporting period in August and September,
covering company results to 30 June, will be an early guide on whether earnings expectations for the 2015 financial year
are likely to be met. This will be important, as the funds managers warn that the share prices of many companies already
reflect a positive profit outcome in the year ahead and are looking fully priced.
The funds managers remain focused on identifying companies selling at realistic prices that are well positioned to support
the objective of growing income. There have been rewards from decisions by both the funds investment managers to
increase holdings in companies they expected to achieve a recovery in earnings and pay higher dividends. One of those
companies, Harvey Norman, has declared total dividends in the last 12 months that are 23.5% above the previous year
and its share price increased by 25.6% in the year.
Contributors to the funds total return this quarter included:
an overweight position in Echo Entertainment Group Limited
not investing in QBE Insurance Group Limited, and
an overweight position in Duet Group .
Detractors from total returns included:
an overweight position in Coca-Cola Amatil Limited
an underweight position in Commonwealth Bank of Australia, and
an overweight position in National Australia Bank Limited.
Over the year to 30 June, good returns have come from companies in the Financials ex-LPTs sector that have dividend
certainty. Resource and Consumer Discretionary company returns have also improved due to better profits and
favourable valuations.
In the year to 30 June, contributors to the funds total return included:
not investing in QBE Insurance Group Limited
an overweight position in Fairfax Media Limited, and
an overweight position in APN News & Media Limited.
Detractors from total returns included:
not investing in Macquarie Group Limited
an overweight position in Metcash Limited, and
an overweight position in Coca-Cola Amatil Limited.
Note:
- Please refer to the Market commentary for an overview of what happened in domestic and global markets over the
quarter.
- Fund commentary for this fund will be updated two to three weeks after the end of the month
Page 3 of 5
MLC MasterKey Investment Service Fundamentals
Fund Snapshot
MLC Wholesale IncomeBuilder™
Market Commentary
As at June 2014
Returns to 30 June 2014*
Asset class
3 mth (%)
1yr (%)
3yr (%)
5yr (%)
10yr (%)
Cash
0.7
2.7
3.6
3.9
5.0
Australian bonds
3.1
6.1
7.0
6.9
6.5
Global investment grade bonds (hedged)
2.6
7.8
7.9
8.4
7.8
A-REITs
9.3
11.1
15.3
14.3
2.3
Global REITs (hedged)
7.8
15.3
13.6
22.5
na
Australian shares
0.9
17.4
10.4
12.2
9.0
Global shares (hedged)
5.4
23.9
14.8
17.3
9.4
Global shares (unhedged)
3.3
19.9
15.6
11.4
4.8
Sources: Datastream, MLC Investment Management. *Annualised returns except for 3 month.
Benchnark data include UBS Bank Bill Index (Cash), UBS Composite Index (Aust bonds) Barclays Global Aggregate hedged to A$ (Global bonds),
S&P/ASX200 A-REIT Accumulation Index (A-REITs), MLC Global property strategy benchmark hedged to A$ (Global REITs), S&P/ASX200
Accumulation index (Aust shares) and MLC global equity strategy benchmark (MSCI All Country Indices hedged and unhedged in A$).
World share markets enjoyed good gains over the quarter, although a stronger Australian dollar did detract from
unhedged global share returns. While the Australian share market produced a positive return, it significantly
underperformed overseas markets, as mining stocks weakened in response to a falling iron ore price.
Bond yields fell in all the major world bond markets, producing solid gains for fixed income investors. Lower bond yields
also provided a boost to listed real estate securities around the globe. Australian real estate securities were the best
performing asset class for the quarter. In addition to lower bond yields, the sector benefitted from a takeover bid for the
Australand Group and news that shareholders had approved the restructure of Westfield.
Share prices have continued to rise, despite heightened geopolitical uncertainty. The crisis in the Ukraine is still
unresolved. More worryingly, Iraq, keeper of the worlds fifth largest oil reserves, is teetering on the brink of collapse, as
radical Islamist forces gain control of large swathes of Iraqi territory. Despite these developments, markets remained well
supported by an improving US economy, some better economic news from China, and the fact that monetary conditions
remain favourable for financial markets. During June, the European Central Bank took further steps to encourage bank
lending and economic growth. The Federal Reserve signalled that the unwinding of its quantitative easing program would
remain gradual, and that interest rates would remain extremely low for some time to come.
In Australia, the Federal Budget didnt appear to have any lasting impact on financial markets. While many individual
measures remain highly controversial, the budget is likely to exert only a modest drag on Australias economic growth over
the coming years. The Australian economic data released over the quarter were quite mixed. Australias economy
expanded at a faster than expected pace in the March quarter. Employment growth has improved, there are some signs of
a pick-up in investment outside of the mining industry, and private sector credit is still expanding. However, both business
and consumer confidence remain fragile, and investment in mining is expected to continue declining.
The Reserve Bank of Australia left interest rates unchanged over the quarter, and has signalled its intention to leave rates
unchanged for some time to come.
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MLC MasterKey Investment Service Fundamentals
Fund Snapshot
MLC Wholesale IncomeBuilder™
Information in this report does not take into account your objectives, financial situation or needs. Before acting on the information you should consider
whether it is appropriate to your situation. You should consider the relevant Product Disclosure Statement before making a decision about the product.
Past performance is not a reliable indicator of future performance. Please also see Advice Warning and Important Information.
MLC Limited (ABN 90 000 000 402 AFSL 230694) is the issuer of:
MLC MasterKey Investment Bond
MLC Nominees Pty Ltd (ABN 93 002 814 959 AFSL 230702 Trustee of The Universal Super Scheme ABN 44 928 361 101) is the issuer of:
MLC MasterKey Business Super (including MLC MasterKey Personal Super), MLC MasterKey Superannuation, MLC MasterKey Super, MLC MasterKey
Super Fundamentals, MLC MasterKey Allocated Pension, MLC MasterKey Pension, MLC MasterKey Pension Fundamentals, MLC MasterKey Term
Allocated Pension
MLC Investments Limited (ABN 30 002 641 661, AFSL number 230705) is the issuer or operator of:
MLC Investment Trust, MLC MasterKey Investment Service, MLC MasterKey Investment Service Fundamentals, MLC MasterKey Unit Trust, MLC
Investments Limited also trades as MLC Private Investment Consulting.
NULIS Nominees (Australia) Limited (ABN 80 008 515 633 AFSL 236465):
trustee of the MLCS Superannuation Trust ABN 31 919 182 354 is the issuer of Navigator Eligible Rollover Fund ABN 32 649 704 922;
trustee of the MLC Superannuation Fund ABN 40 022 701 955 is the issuer of MLC Wrap Super and MLC Navigator Retirement Plan.
Navigator Australia Limited (ABN 45 006 302 987 AFSL 236466) is the Operator and issuer of:
MLC Wrap Investments, MLC Wrap Self Managed Super and MLC Navigator Investment Plan.
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