Improving Retirement Security in SingaporeSchroders: Your Partner for Retirement Solutions

Represented by:

Susan Soh

Country Head, Managing Director

Schroder Investment Management (Singapore) Ltd

April 2012

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1. What a Retirement Solution Should Offer

2. Schroders’ Multi-Asset Capabilities

3. 3 Case Illustrations

Agenda

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� A portfolio reflective of an individual’s risk budget

� Flexibility to access a spectrum of asset classes to achieve optimal risk-adjusted return

� Ability to dynamically re-balance the portfolio as market cycle changes

� A time-sensitive portfolio that seeks to reduce risk as retirement age approaches

1. What a Retirement Solution Should Offer

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Risk Profile Driven Portfolio- Aggressive- Balanced- Conservative

SMART- Included under CPFIS in

April 2010- Reference benchmark of

60% MSCI World & 40% Citi WGBI

Target Date Maturity� Accumulation� De-accumulation� Both

Customized Reference Benchmark

- 70/30- 50/50- 30/70

Outcome Oriented Solution- Risk budget of 15% of the

highest NAV ever achieved- Asian Centric / EM Centric

multi-asset portfolios

4

Schroders’ Retirement OfferingsDeveloped on a solution-based approach to cater to differing risk profiles

Source for fund sizes: Schroders, as at 31 Mar 2012

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Access to a wide range of investment opportunitiesEach economic phase delivers different investment opportunities

� Depending on the phase of the economic

cycle we are in, different asset classes will

outperform

� We define the economic cycle with reference

to the position of the US economy (growth

and output gap) relative to their long-term

trend

� In some cycles, alternatives perform better

than traditional asset classes i.e. equities

and bonds

� We need to be able to access a wide range

of asset classes including alternatives in

order to generate returns in all phases of the

economy cycle

We are here now

denotes alternatives

Source: Schroders, Datastream. Data are that of the S&P 500, GSCI commodity, CSFB hedge fund, US 10 yr Government

Bonds, UK IPD Property, Barclays (ML) Credit Bonds, US DS Sectors, LPX50 Private equity index and MSCI World Infrastructure Index

66

Access to A Spectrum of Asset ClassesFlexible: broadly diversified to achieve steady wealth accumulation over time

Sovereigns

Global bond exposure serves to cushion volatility of equity exposures whilst providing steady yield for the portfolio

Access to a wide range of asset classes and investment strategies

enables portfolio to generate returns over cycles rather than only

during bull markets

Emerging Market Bonds

Exposure to bonds and currency in less efficient emerging markets generally issued by the government

Aims to generate positive returns

over a 12 month rolling period and is lowly correlated to other assets

Commodities

Commodities tend to display low correlation to traditional asset classes. Uncertainty, a curse for equity investors, can often be ofbenefit to commodity investors.

Asian Bonds

Exposure to Asian bonds and currencies

Aims not to lose value on a rolling 12 month basis whilst generating strong returns

Property Securities/REITs

Shares of listed property companies that invest in a diverse range of properties such as offices, hotels, industrial sites and residential properties.

“Real assets” which can potentially provide attractive returns and has a low correlation

between regional returns.

Global Inflation Linked Bonds

Invests in high quality inflation linked bonds issued by governments or their agencies; Offers protection from the effects of rising

inflation

Global Credit

Invests primarily in investment grade corporate bonds. This asset can provide higher level of yield as compared to government bonds, cash or equities

Currencies

Currencies are managed actively to generate

additional returns for the portfolio where we believe opportunities exist.

Equities

Exposures to Global, Asia, Emerging Markets and Japan equities

Provide portfolio with the potential of upside returns.

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We Need an Intelligent Solution That Moves With The MarketDynamic: A Chance for Investors to Invest in Top Performing Assets and Avoid Worst Performing Assets

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

22 103 17 20 31 14 23 65 32 1 26 47 38 45 42 41 11 73 30 10

6 72 9 19 23 0 15 60 14 -1 24 41 18 23 34 32 3 38 20 6

4 20 3 19 12 -3 0 24 2 -4 19 31 13 21 24 16 -36 27 20 -6

-6 17 2 15 10 -7 -7 24 -6 -4 3 25 11 17 18 11 -41 27 17 -8

-7 13 -2 4 4 -19 -8 9 -14 -18 -8 24 10 15 6 7 -42 19 10 -13

-15 11 -14 2 -4 -22 -8 1 -25 -19 -17 22 9 8 3 -7 -48 8 5 -17

-23 -1 -17 1 -6 -40 -27 -4 -35 -20 -21 15 5 -7 2 -11 -52 3 1 -17

1997Asian Financial

Crisis

1999 – 2001 Bear market, dot.com bubble

burst, followed by US Recession 2008

Credit Crisis1998

Russian Debt Crisis

Weaker Growth Weaker Growth Weaker Growth

Global

Equities

Asian

Equities

Japan

Equities

Global

Bonds

Commodities Gold Property

>2012

?

Source: Thomson Datastream. Calendar Year Returns are expressed in indices’ base currency. Global Equities represented by MSCI World. Asian Equities represented by MSCI AC Asia ex Japan; Japan Equities represented by TOPIX; Global Bonds represented by Citi WGBI; Commodities represented by DJ UBS Commodity Index; Gold represented by Gold Bullion LBM U$/Troy Ounce; Property represented by FTSE EPRA NAREIT Developed Real Estate

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Time-Sensitive Portfolio to De-risk as Retirement Age Approaches

Dynamic alignment of risk level to the lifecycle stage and market conditions

Definition of Risk

� Measurement of Risk is not only at

Equity level but: also as credit risk,

commodity risk, property risk.

� Actual asset allocation will depend

on the attractiveness of each asset

class in that investment cycle.

� Starting point is not always 100%

equity. This introduces too much

risk and increases the chance an

investor does not have sufficient

money to fund retirement.

Source: Schroders. For illustrative purposes only.

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Experience and Scale

� Managing Multi-Asset solutions in Asia since 2002

� US$54.0 billion in assets managed globally

� Over US$7 billion in assets managed in Asia

Strength and Resources

� Experienced and well-resourced team in Asia managing dedicated portfolios for Singapore, Hong Kong, Taiwan, Japan, Australia, Malaysia and Korea

� Fully integrated into a wider global multi-asset investment team comprising over 40 investment professionals to leverage off global capabilities

� Access to the capabilities and resources over 300 fund managers and analysts worldwide

AUM as at 31 December 2011Resource numbers as at 29 February 2012Note: AUM by client domicile and includes advisories

Investment Team Role Location Yr of exp

Al CLARK Head of Multi-Asset, Asia Pacific Singapore 18

Dr Richard COGHLAN Head of Multi-Asset, Hong Kong Hong Kong 15

Simon DOYLE Head of Fixed Income and Multi-Asset, Australia Sydney 24

Simon STEVENSON Head of Strategy, Australian Multi-Asset Sydney 19

KIM Seung Ju Fund Manager, Multi-Asset Hong Kong 15

Jeffrey KAN Fund Manager, Multi-Asset Hong Kong 8

Joseph GREIF Fund Manager, Multi-Asset Hong Kong 7

PANG Kin Weng Fund Manager, Multi-Asset Singapore 5

CHANG Pei Ling Fund Manager, Multi-Asset Taipei 14

Brian LEE Fund Manager, Multi-Asset Taipei 19

Oscar CHUANG Fund Manager, Multi-Asset Taipei 12

Average 14

Product Management Role Location Yr of exp

Garth TALJARD Product Manager, Asian Multi-Asset Hong Kong 11

Regine TAN Product Executive, Asian Multi-Asset Singapore 8

Ricky TANG Product Executive, Asian Multi-Asset Hong Kong 4

Karen CHOW Product Executive, Australian Multi-Asset Sydney 4

Average 7

2. Schroders’ Multi-Asset CapabilitiesThe only multi-asset team in Singapore managing CPFIS-OA included retirement solutions

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Diversification benefits can disappear Diversification benefits can leave just when you need them most

� Correlations measure the degree of diversification benefits

� In ‘good times’ correlation can be sufficiently low to achieve diversification

� In ‘good times’ you don’t need diversification as much

� In ‘bad times’ correlations can rise as asset classes are driven by fear

� Diversification benefits can decline just when they are needed most

Rolling asset class correlations

Source: Schroders, Datastream, as at Jul 2011. Equities represented by MSCI World, Corporates by Lehman Global Aggregate Credit, Commodities by UBS DJ Commodity

-1.0

-0.5

0.0

0.5

1.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Equities vs Corporates Equities vs Commodities Corporates vs Commodities

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Understanding asset class definitionsA basket of risk premia – for which you want to get paid

Source: Schroders

Equity

LiquidityLiquidity Liquidity Liquidity

TermTerm Term Term

InflationInflation Inflation

CreditCredit

Governments TIPS Corporates Equities

Risk

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Building a portfolio based on risk premia

12

Understanding the risk reward tradeoff

Traditional portfolio in capital space

Fixed Income

Equity

Commodities

Credit

Equity

Liquidity

Inflation

Term

Optimal Portfolio in risk space built around risk premia

Strategy

Equity

Fixed IncomeEM DebtIndex LinkedCorporateSovereign

Strategy Premia

Commodities

Optimal portfolio in capital space

Risk

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Typical balanced portfolioDisappointing results vs. expectations

� Compare the performance of a 60/40 portfolio

� Capital allocation terms

� Risk allocation terms

� A 60% allocation to equities can result in a 90% contribution to risk

Typical 60/40 portfolio performance in 2008

Source: Schroders, Datastream, as at December 2008

-20%

-10%

0%

10%

60/40 Capital Allocation

60/40 Risk Allocation

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A Flexible Approach

What if the risk premia change?

� To exploit changing risk reward opportunities

� Dynamically allocate amongst premia

Yield Curve Gap

Source: Schroders, Datastream

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2003 2004 2005 2006 2007 2008 2009 2010 2011

The risk premia payoff varies providing opportunities for active management

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Year Awarded by Category Period / Fund Type

2011 Asia Asset Management – Best of the Best Awards 2010

The Best Institutional House in Hong Kong Year 2010

2011 Lipper Fund Awards Hong Kong 2011Best Equity Global Fund – Schroder Growth Fund

5-year & 10-year performance

2011 Lipper Fund Awards Hong Kong 2011Best Mandatory Provident Fund – Schroder MPF Growth Portfolio

3-year performance

2010 Lipper Fund Awards Hong Kong 2010Best Equity Global Fund – Schroder Growth Fund

3-year & 5-year performance

2008 AsianInvestor Magazine’s 2008 Investment Performance Awards

Hong Kong Total Plan 3-year performance

2007 AsianInvestor Magazine 2007 Fund Manager Awards for Achievement

Best Hong Kong Balanced Fund 3-year risk-adjusted performance

2006 Asia Asset Management Awards 2006 Hong Kong Balanced Funds 1-year & 3-year on a risk adjusted basis

2005 SCMP Fund Manager of the Year Awards 2005

Asset Allocation Global Neutral 3-year performance

2005 AsianInvestor Magazine 2005 Fund Manager Awards for Achievement

Stable Growth Fund 1-year performance

2005 AsianInvestor Magazine 2005 Fund Manager Awards for Achievement

Capital Stable Fund 1-year performance

2004 Asia Asset Management 2004Best of the Best Achievement Awards – Most Innovative Product

Multi-Asset

Our Asian Multi-Asset team has consistently won awards for superior performance

The success of our asset allocation process, led by the Global Asset Allocation Committee (GAAC), can also be demonstrated by our team in UK who has been awarded as the “Winner of the Financial Times Pension & Investment Provider Awards (UK) for 2008 and 2011”. In addition Schroders plc is also the “Global Pension Awards 2010 Winner”

Note: Awards listed under the calendar year are reviewed based on performance as of 31 December in the previous year.

Schroders’ Multi-Asset CapabilitiesAn award winning investment strategy, managed by the Asian multi-asset team

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Schroders’ Multi-Asset CapabilitiesOngoing commitment to broaden investment universe with high quality products

Schroder Singapore Fixed

Income Fund

4 Aug 2009

9 Jun 2009

Schroder Singapore Trust

Schroder Multi-Asset Revolution

23 Apr 2010

29 Apr 2010

Schroder Asian Growth Fund

17 Jun 2010

Schroder ISF Global Emerging Market

Opportunities

Schroder ISF Global Equity

Alpha

5 May 2010

Schroder ISF China Opportunities

31 Jan 2011

5 Oct 2011

Schroder Asian Premium

Bond Fund

17 Sep 2009

Schroder ISF Greater China C

Acc

Schroder ISF QEP Quality

Expected Q2 2012

Source: Schroders, Morningstar, S&P, OBSR as at 31 Mar 2012

Asian Equity Yield and BRIC will be our next 2 projects in H2 2012

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� From January 2009, worked with

Morningstar to review more than 10

Schroders’ products.

� CPF board approved SMART to receive

CPF monies in April 2010.

� In June 2011, created SMART 30, SMART

50 and SMART 70, customised to the

needs of an insurance company client.

� SMART is 5-star rated by Morningstar as at

31 Mar 2012. Best performing fund in

Singapore unit trust – global balanced

neutral category over 1-year, 2-year, 3-year,

4-year, 5-year and since restructuring.

3. Case Illustration 1: SMART and SMART 30, 50 and 70

The first and also only CPFIS-OA/SA included multi-asset fund in Singapore

3m 6m 1Y 3Y (p.a.)

Since Restructuring

(p.a.)3

Fund (Bid-Bid) 5.3 8.0 1.7 9.6 2.7

Benchmark13.4 7.6 2.5 7.8 0.2

Peer Average24.7 7.6 -0.8 6.9 0.3

Fund (Offer-Bid) 0.1 2.6 -3.3 7.8 1.8

Rating of SMART as at 31 Mar 2012

Morningstar Overall Rating

Lipper 5 Year Rating

Performance of SMART as at 31 Mar 2012 (%)

1. The Fund’s benchmark is a composition of 60% MSCI World NR + 40% Citi WGBI (World Government Bond Index)

2. Based on the Morningstar Singapore Registered Funds – Global Neutral Peer Group.

Source for ratings: Morningstar and Lipper as at 31 Mar 2012

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TDMF 1

� Launched in 2009 for a local insurance company in Singapore.

� 5 portfolios of different target maturity dates: -

Now 2025 2045

2015 2035

� CPFIS included in 2011

TDMF 2

� Took over management of a target date maturity series previously run on a multi-

manager basis

� Glide path used is based on target volatility rather than fixed asset allocation

� Worked with insurance company to educate distribution network on the change

Case Illustration 2: Target Date Maturity Funds (TDMF)

Customised solutions for different partners

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A defined contribution plan introduced in 1999 for permanent staff, fully funded by company

Key benefits:

� Provides staff with a sound financial retirement plan, supplementing the CPF scheme.

� Contribution locked at 14% of an employee’s salary; split between mandatory Employer

contribution to CPF, the balance to the Schroder Retirement Benefit.

� Given CPF changes in past years (e.g. employer contribution cuts), savings for the company

passed back to employees via the Schroder Retirement Benefit Plan.

� In event an employee becomes disabled or passes away, scheme supplements other benefits

provided under the company’s insurance policies

Case Illustration 3: Schroder Retirement Benefit Plan

Schroders’ own testament on retirement investing

Fund BM Fund BM Fund BM BM Fund BM Fund BM Fund BM

% % % % % % % % p.a. % p.a. % p.a. % p.a. % p.a. % p.a.

Total Equity 1.26 4.08 3.40 23.03 0.50

Total Cash 0.00 -0.03 0.00 -0.08 -1.24 -7.36

Total Fund (NET) 1.24 0.20 3.87 0.59 3.23 0.39 2.40 9.19 2.46 -0.38 2.89 5.87 3.341.57 1.18 0.23 2.05 2.44

-0.23 -0.17 0.06

% p.a.

1.01 -5.19 3.25

% % % % p.a.

Fund BM Fund Fund BM

5 Years rolling Since Inception3 Months 6 Months YTD 1 Year rolling 2 Years rolling 3 Years rolling1 Month

Source: Schroders, as at 29 Feb 2012. Benchmark: 29 Feb 2008 – current: 3mth SIBOR + 2.0% (p.a); 31

Aug 2001 – 29 Feb 2008: 4% p.a.; 15 Jan 1999 – 31 Aug 2001: CPF Ordinary Account Interest Rate

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The information and opinions contained in this document have been obtained from sources Schroders considers to be reliable however these have not been checked or verified by Schroders. The information contained herein is provided as a guide only and any person who may receive this document must make his own investigations and must satisfy himself as to the accuracy and completeness of information, and suitability of investments for his investment purposes, needs or requirements. Schroders, their directors and employees may have positions in and may effect transactions in securities mentioned in this document.

This document and its contents are not intended to constitute an offer for sale, prospectus, invitation to subscribe for or purchase or otherwise acquire any of the instruments referred to herein. For the avoidance of doubt, there is no intention to create a legal contract.

Neither Schroders nor any of its officers or employees have any authority to give any representations or warranty whatsoever and no responsibility is accepted by any of them in relation to the information in this document and accordingly Schroders shall not be liable for any loss or damages or expense of any kind whatsoever or howsoever arising from the person's use of the information contained in this document.

This document is published for the information and generation circulation of distributors of Schroder funds only and does not have any regard to the specific investment objective, financial situation and the particular needs of any specific person who may receive this document. Investors may wish to seek advice from a financial advisor before purchasing units of any fund. In the event that the investor chooses not to seek advice from a financial advisor, he should consider whether the fund in question is suitable for him.

Past performance and any forecast are not necessarily indicative of the future or likely performance of any fund. Past performance of manager is not necessarily indicative of its future performance. The value of units in the Fund, and the income accruing to the units, if any, from the Fund, may fall as well as rise. A copy of the prospectus is available and can be obtained from Schroder Investment Management (Singapore) Ltd or its distributors. Investors should read the prospectus before deciding to subscribe for or purchase units in the fund. Funds may carry a sales charge of up to 5%.

Distributions of 2 cents per unit will be declared semi annually on 15 January and 15 July. The distributions are not guaranteed and might be changed in the event of extreme market conditions or at the Manager’s discretion in accordance with the Trust Deed. Ordinarily, they will be reviewed annually. In the event of the Schroder Asian Balanced Fund’s total return being less than 4 cents per unit per annum, distributions will be made from capital, subject to trustee approval. Investors should be aware that the distributions may exceed the total return of the Fund at times and lead to a reduction of the amount originally invested, depending on the date of initial investment.

The Central Provident Fund (“CPF”) interest rate for the Ordinary Account (“OA”) is based on the 12-month fixed deposit and month-end savings rates of the major local banks. Under the CPF Act, the CPF Board pays a minimum interest of 2.5% per annum when this interest formula yields a lower rate. From 1 Jan 2008, the new interest rate for the Special, Medisave and Retirement Accounts (“SMRA”) will be pegged to the yield of 10-year Singapore Government Securities plus 1%. For 2011, the minimum interest rate for the SMRA will be 4.0% per annum. After 31 December 2011, the 2.5% per annum minimum interest rate, as prescribed by the CPF Act, will apply to the SMRA. In addition, the CPF Board will pay an extra interest rate of 1% per annum on the first $60,000 of a CPF member’s combined balances, including up to $20,000 in the OA. The first $20,000 in the Ordinary Account and the first $40,000 in the Special Account will not be allowed to be invested under the CPF Investment Scheme (“CPFIS”). Investors should note that the applicable interest rates for each of the CPF accounts may be varied by the CPF Board from time to time.

Schroder Investment Management (Singapore) Ltd65 Chulia Street, #46-00, OCBC Centre Singapore 049513Telephone: 1800 534 4288 Fax: +65 6536 6626 Registration No.: 199201080H

Important Information