Principal Global Investors

Wealth Management

February 2008

Giles Gunesekera

Director, Head of Third Party Sales

Agenda

Global Markets, the Economy and US Housing

Is Corporate America Vulnerable?

Product innovation how is the market evolving?

Where to from here?

Icebreaker

We will are living in tumultuous times;

On the Australian front, ASX setting records again, closing at ???? OvernightThe Australian market is verging on having its first $100 stock with Macquarie, Rio Tinto and CSL in the raceChina sharemarket corrected in February 2007 to go from returning 135% to a paltry 125%!Macquarie Bank continues to make billions by aiming to own every piece of concrete and bitumen in the worldFederer finally beat Nadal on clay breaking his 212 recordAnd Paris Hilton is still going to Prison

Times are changing!

This is the agenda we will be covering today

The key message is that although markets have been exhibiting some volatility of late, the economic fundamentals are strong and auger well for economies and corporates alike

Global Markets, the Economy and US Housing

Where are Global Interest Rates Headed?

Source: FACTSET and Principal Global Investors

Chart4

4.0231.516.326

3.9381.4785.997

4.4711.616.174

4.5871.6856.145

4.5291.6135.918

4.7391.86.031

5.0241.8796.256

4.8881.7536.015

4.6221.665.879

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4.73171.625.675

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4.29561.465.76

3.93951.395.39

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3.51610.845.015

3.37280.534.87

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3.80910.6955.33

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3.81810.95.16

4.21090.9955.73

3.89680.9855.61

3.60011.1755.36

4.12971.195.76

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5.72871.886.28

6.03981.6656.26

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5.8811.716.31

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5.6241.486.01

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4.6030.844.97

4.4220.7855.08

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6.722.487.85

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6.683.468.74

6.323.2358.9

6.083.4958.665

5.613.258.04

5.573.078.48

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6.042.968.71

6.192.8558.6

6.293.2659

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7.084.28.44

6.774.2467.95

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5.664.026.35

United States

Australia

Japan

Percent

Ten Year Government Bond Yields

rates

Fed Funds

United Kingdom

Report date:04-May-2007

Legend

USA14030 =Policy Rates Fed Funds Rate (Effective), Percent, Average - United States

USA14021 =Government Benchmarks 10 year, Yield, Percent, End of Period - United States

GBR14020 =Government Benchmarks 10 year, Yield, Percent, End of Period - United Kingdom

DEU14020 =Government Benchmarks 10 year, Yield, Percent, End of Period - Germany

JPN14020 =Government Benchmarks 10 year, Yield, Percent, End of Period - Japan

AUS14020 =Government Benchmarks 10 Years, Yield, Percent, End of Period - Australia

DatesUSA14030USA14021GBR14020DEU14020JPN14020AUS14020

31-Dec-20074.021.516.33

30-Nov-20073.941.486.00

31-Oct-20074.471.616.17

30-Sep-20074.591.696.15

31-Aug-20074.531.615.92

31-Jul-20074.745.214.351.806.03

30-Jun-20075.025.464.571.886.26

31-May-20074.895.264.421.756.02

30-Apr-20074.625.044.151.665.88

30-Mar-20075.264.654.944.071.655.89

28-Feb-20075.264.574.803.961.645.70

31-Jan-20075.254.814.984.091.715.94

29-Dec-20065.244.704.743.961.695.88

30-Nov-20065.254.464.513.691.665.60

31-Oct-20065.254.604.523.741.735.67

29-Sep-20065.254.644.523.711.695.51

31-Aug-20065.254.734.523.761.625.68

31-Jul-20065.244.984.603.921.945.85

30-Jun-20064.995.154.704.071.935.80

31-May-20064.945.134.593.961.825.74

28-Apr-20064.795.064.613.961.935.70

31-Mar-20064.594.864.403.771.795.43

28-Feb-20064.494.554.193.491.605.30

31-Jan-20064.294.524.153.461.585.36

30-Dec-20054.164.404.093.301.485.20

30-Nov-20054.004.494.203.451.445.35

31-Oct-20053.784.564.333.391.555.48

30-Sep-20053.624.334.293.161.495.37

31-Aug-20053.504.024.153.111.365.06

29-Jul-20053.264.284.313.251.325.14

30-Jun-20053.043.924.173.131.185.06

31-May-20053.003.994.313.271.255.16

29-Apr-20052.794.214.533.401.255.35

31-Mar-20052.634.494.693.631.345.67

28-Feb-20052.504.384.783.691.485.57

31-Jan-20052.284.134.603.541.345.41

31-Dec-20042.164.224.543.681.435.33

30-Nov-20041.934.364.593.791.455.24

29-Oct-20041.764.034.743.871.495.40

30-Sep-20041.614.124.833.991.445.47

31-Aug-20041.434.124.924.021.545.59

30-Jul-20041.264.485.094.211.865.85

30-Jun-20041.034.585.104.311.795.87

31-May-20041.004.665.154.381.525.86

30-Apr-20041.004.514.984.171.545.95

31-Mar-20041.003.844.753.941.445.50

27-Feb-20041.013.974.774.051.235.55

30-Jan-20041.004.134.914.241.315.85

31-Dec-20030.984.254.774.291.365.61

28-Nov-20031.004.335.044.471.305.95

31-Oct-20031.014.305.024.321.465.76

30-Sep-20031.013.944.543.991.395.39

29-Aug-20031.034.474.614.201.465.55

31-Jul-20031.014.414.534.190.945.41

30-Jun-20031.223.524.173.810.845.02

30-May-20031.263.374.073.730.534.87

30-Apr-20031.263.844.334.090.615.31

31-Mar-20031.253.814.304.050.705.33

28-Feb-20031.263.694.183.920.785.09

31-Jan-20031.243.974.294.060.805.20

31-Dec-20021.243.824.384.190.905.16

29-Nov-20021.344.214.684.481.005.73

31-Oct-20021.753.904.574.520.995.61

30-Sep-20021.753.604.384.271.185.36

30-Aug-20021.744.134.634.581.195.76

31-Jul-20021.734.464.874.751.315.98

28-Jun-20021.754.815.024.941.316.06

31-May-20021.755.045.275.171.396.22

30-Apr-20021.755.095.205.121.376.10

29-Mar-20021.735.425.305.221.396.34

28-Feb-20021.744.875.004.961.535.96

31-Jan-20021.735.054.894.911.485.99

31-Dec-20011.825.035.075.001.376.03

30-Nov-20012.094.754.664.561.365.58

31-Oct-20012.494.244.524.401.315.23

28-Sep-20013.074.594.884.791.415.51

31-Aug-20013.654.844.854.791.385.55

31-Jul-20013.775.065.004.881.346.06

29-Jun-20013.975.425.295.101.196.08

31-May-20014.215.395.205.171.246.03

30-Apr-20014.805.345.115.031.295.83

30-Mar-20015.314.914.844.701.285.31

28-Feb-20015.494.904.874.761.355.26

31-Jan-20015.985.114.844.801.505.35

29-Dec-20006.405.114.894.841.645.45

30-Nov-20006.515.484.895.011.625.76

31-Oct-20006.515.765.185.221.826.18

29-Sep-20006.525.815.205.231.886.20

31-Aug-20006.505.735.345.301.886.28

31-Jul-20006.546.045.225.201.676.26

30-Jun-20006.536.035.195.201.766.17

31-May-20006.276.295.185.211.656.28

28-Apr-20006.026.225.215.301.766.42

31-Mar-20005.856.025.245.221.786.40

29-Feb-20005.736.415.455.501.836.68

31-Jan-20005.456.665.735.541.727.19

31-Dec-19995.306.445.485.351.636.95

30-Nov-19995.426.195.235.131.826.66

29-Oct-19995.206.035.405.161.806.64

30-Sep-19995.225.885.625.081.716.31

31-Aug-19995.075.975.184.901.926.38

30-Jul-19994.995.925.404.811.796.25

30-Jun-19994.765.795.074.491.906.30

31-May-19994.745.624.864.121.486.01

30-Apr-19994.745.354.603.911.415.52

31-Mar-19994.815.244.584.001.665.53

26-Feb-19994.765.294.634.0