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Fidelity Ucits II ICAV - Fidelity Global Government Bond Climate Aware Ucits ETF AccumHedged GBP — Fidelity — Investor Presentation (November 2005)
57 slides from Fidelity Ucits II ICAV - Fidelity Global Government Bond Climate Aware Ucits ETF AccumHedged GBP's investor presentation, November 2005
Slide 1: A Perspective on an Old Classic
A ~ PERSPECTIVE ‘ ON AN OLD CLASSIC Gaass"
Slide 2: Retirement Planning Masterclass, November 2005
wh Dik Dea Del De Retirement Planning Masterclass November 2005 (one = ae Fidelity Retirement Ptanning MasterClass ©° Fidelity-
Slide 3: The retirement market
The retirement market Impacts of an ageing population Producing income in retirement Retirement asset allocation -a new approach Uses of Fixed Income A MultiManager solution
Slide 4: The retirement market
wh Dik Dea Del De The retirement market (one = ae Fidelity Retirement Ptanning MasterClass ©° Fidelity-
Slide 5: Retirement market issues
Retirement market issues _ Savings gap _ Changing demographics _ State pension - Legislative changes
Slide 6: Changing Demographic Landscape
Changing Demographic Landscape Number of Over 65's in the UK wor Over65s(LHS}) = Working Age (RHS) E c C] s & | & ° a 2010 2015 2020 2025 2031 Years
Slide 7: Pension crisis?
Pension crisis? Unpalatable choices: ®@ Pensioners will become poorer relative to the rest of society OR ® Taxes/National Insurance contributions devoted to pensions must rise OR ® Average retirement ages must rise OR ® Savings must rise “Present policies, if continued indefinitely, will mean substa
Slide 8: A significant market
A significant market Personal sector non-pension financial assets: 2003 0 Pension Fund Assets Cash Collectives Insurance Property Assets ymeniesion Report, personal sector on-gension financial assets: 2003 (D— . Aideltty Retirement Panning MasterClass © Fidelity-
Slide 9: Simplification, simplified April 2006 A-Day
Simplification, simplified 6 April 2006 “A-Day” - unified tax regime _ Key proposals: @ One set of investment rules for all pensions Concurrency: Occupational scheme & Personal scheme (e.g. SIPP) Flexibility: Annuity purchase, or Altematively Secured Pension, at age 75 Contributions: Up to 100%, of
Slide 10: Growth in SIPP market
Growth in SIPP market SIPP New Business Premium Forecast (£m) 3000 - 2 * E 2 E 6 2 a 2 c a a a : 2004e 2005f 2006f 2007f 2008f ce. Datamontor Lée and Persons fore Fidelity Retirement Planning MasterClass 2009f © Fidelity 10
Slide 11: Impacts of an ageing population
wh Dik Dea Del De Impacts of an ageing population __ idetty Retirement Ptanning MasterClass 11
Slide 12: Changing Demographic Landscape
Changing Demographic Landscape Number of Over 65's in the UK wm Over65s(LHS}) = = Working Age (RHS) 2010 2015 2020 2025 2031 Years wo rs S E c S s x | & 9 a 12
Slide 13: People expected to live longer
People expected to live longer 33% Chance of one survivor 13
Slide 14: And expectations are increasing
And expectations are increasing 1981 2004 2050 83.9 86.7 eared 83 86.9 89.4 Age 65 — 66% of men between 25 & 34 expect to retire before age 65 _ 74% of women expect to retire at 60 or earlier 14
Slide 15: Consumer Life Cycle
Consumer Life Cycle Education Income/assets 39 Years Working Life Working Life 30 Years 15
Slide 16: Pensioners struggling
Pensioners struggling 2m out of the 11m retired population are in financial difficulty 1.6m have returned to work 3.8m have had to cut back their spending (enone Fidelity Retirement Ptanning MasterClass Fideli at] 16
Slide 17: And the future?
And the future? _ 33% not saving for retirement _ 4% comfortable in retirement _ Other priorities: Property, debt 66% think property is the best long-term investment Use home as income 17
Slide 18: Growth in Equity Release market
Growth in Equity Release market Equity release new advances 2002 ce Councé of Mortgage Lenders, August 2005 Ci _ Fidelity Retirement Ptanning MasterClass © Fidelity~ 18
Slide 19: The impact of an ageing population
The impact of an ageing population — Longevity _ Under funding _ Other priorities _ Ignorance _ Falling annuity rates 19
Slide 20: Key Issues
Key Issues _ How much to save _ How long ‘retirement pot’ will need to last for _ Withdrawal rate Understand which investments can meet objectives 20
Slide 21: Product considerations
Product considerations MUTUAL FUNDS PENSIONS Tax efficient Tax-relief Investment flexibility @ More flexible post A-day Annuit ch Transfer to SIPP at 75 aa, =~ Access Onshore/Offshore investment bonds * Tax benefits for certain clients @ Widening fund range 21
Slide 22: Producing Income in Retirement
wh Dik Dea Del De Producing Income in Retirement __ idetty Retirement Ptanning MasterClass 22
Slide 23: Risks to retirement income
Risks to retirement income Longevity Compounding Inflation Healthcare Withdrawal rates Investment uncertainty
Slide 24: Compounding
Compounding Benefit of early saving £1,200,000 £1,000,000 £800,000 £600,000 Value (£) £400,000 £200,000 £0 © ~ ——_idelty Retrement Panning MaserClass © Fidelity- 24
Slide 25: Effect of inflation
Effect of inflation Source. Fidelity, based on £ £45,000 £40,000 £35,000 £30,000 £25,000 £20,000 Living expenses m = wo r £10,000 £5,000 £0 Fidelity Retirement Planning MasterClass ving expenses at age 65 and regular 25% 80 Age rate of inflation 25
Slide 26: Core expenses inflating more
Core expenses inflating more Annual Inflation For Retirement Related Expenses Water, Electricity, Gas Petrol Council Tax Bingo Eating Out Holidays Hospital/Nursing Homes Pekdays sutlect Cywar fuer, Hoapta services: 3 Yaar. Singo casts bared on svarage spend per visttor mn thboets, net of wwneings (*
Slide 27: Healthcare
Healthcare Long-term care costs borne from capital or retirement income mmm Pre-funded policies (LHS) = Immediate needs policies (RHS) 9000 800 8000 700 7000 600 2 6000 500 5000 400 4000 300 Number of Policies Number of Policies 3000 2000 200 1000 100 0 1996 1997 1999 2000
Slide 28: Excess Withdrawal Risk
Excess Withdrawal Risk Prudent Withdrawal Rates Can Extend the Life of a Portfolio 10% Withdrawal 8% Withdrawal 6% Withdrawal Rocks and [0% im carh Aibdomals have bean mcrenre 28
Slide 29: Uncertainty
Uncertainty With Return Volatility 29
Slide 30: Asset class characteristics
Asset class characteristics Security and access Income dependent on interest rates Unlikely to beat inflation No income or capital growth Bonds Reduce volatility - diversification Consistent & high income No income growth Limited potential for capital growth (DP Aidetity Retirement Ptanning MasterCa
Slide 31: What about Property?
What about Property? Reduce volatility - diversification Relatively high income Potential for rising income _ Similar profile to fixed income _ Provides additional degree of diversification 31
Slide 32: Summary
Summary _ People living longer _ Not saving enough _ Financial difficulty — ‘Retirement Fund’ Risks to retirement income _ Asset allocation is key WHIT = 5 Aadeliy Retirement Ptanning MasterCiass . we 32
Slide 33: A new approach to asset allocation
wh Dik Dea Del De A new approach to asset allocation (one = ae Fidelity Retirement Ptanning MasterClass ©° Fidelity-
Slide 34: Investors more cautious
Investors more cautious Net Industry Retail Sales On: Fidelity Retirement Ptanning MasterClass 34
Slide 35: Caution can be unhealthy
Caution can be unhealthy £3,500,000 +- £3,000,000 £2,500,000 £2,000,000 £1,500,000 £1,000,000 35
Slide 36: Traditional Method
Traditional Method Equities Annuitise Fixed Income 36
Slide 37: A new approach to asset allocation
A new approach to asset allocation _. Equities Fixed Income 37
Slide 38: Case Study
Case Study @ Asset atloc ation s¢ Minte: There bs 2 of getting greater thea the high re © of getting less than the ter 38
Slide 39: Case Study
Case Study Pian for Juets Copley The graph shows Possible Cutcome Diagrams (PODs) for your client's investment plan. The widest part of each POO is the most tkely return, whilst tre height indicates the range of possible returns. The dotted line t= the target amount. See warning You may aso adjust t
Slide 40: Natural income strategy
Natural income strategy om Calendar Year Income (RHS) Capital Growth (LHS) £240 £00 £44,323 income produced (5.5% pa) £45,030 increase in capital £220,000 £200 200 £180,000 £160,000 Capeai Growth £140 200 £120,000 40
Slide 41: Drawdown strategy
Drawdown strategy £100,000 investment £140,000 £120,000 + £100,000 £80,000 £60,000 Portfolio Value £40,000 £20,000 Jan 98 Jul 97 Jul 98 Jan 99 Jul 99 Jan 00 Jul 00 Jan 01 Date Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 n portiotio inve 210% Uk Jan 05 Jul 04 Jul 05 41
Slide 42: Fixed Income
We 5 Ve We" Fixed Income (one = ae Fidelity Retirement Ptanning MasterClass ©° Fidelity-
Slide 43: Core reasons to hold bonds: income
Core reasons to hold bonds Provide income Income price % - o oer NHN We OF Qs © OO For illustrative purposes amas Fidelity Extra Income Fund Fidelity MoneyBuilder Income Fund Dec Jun 4 6 43
Slide 44: Core reasons to hold bonds: volatility
Core reasons to hold bonds Provide income Volatility % For illustrative purposes “™ FTSE All-Share Sterling Corporates ™ Sterling Gilts 703 2009 2004 «20S 44
Slide 45: Core reasons to hold bonds: diversification
Core reasons to hold bonds Provide income Diversification benefits For illustrative purposes 45
Slide 46: Core reasons to hold bonds: liability management
Core reasons to hold bonds Provide income Diversification benefits Liability management 2 Ss = 2 v e “ o 2 = 2 - wn ° v 2 2 é e < For illustrative purposes — MoneyBuilder Income share price Annuity cost 90 95 96 98 99 OO 01 30 02 03 O4 06 OOL 9} paseqes eayd aueys ewosuy JepyngAesuoy 46
Slide 47: Fidelity's Fixed Income range
Fidelity’s Fixed Income range Fidelity Fidelity MoneyBuilder Income Extra Income Fund S&P rating ABA AA Fidelity Sterling Bond Fund BA IMA sector UK Corporate Bonds UK Other Bonds UK Corporate Bonds Requires additional income without more risk Wants high income with Target investor low risk Wants in
Slide 48: Fidelity Sterling Bond Fund
Fidelity Sterling Bond Fund _ Managed by lan Spreadbury _ Flexible asset allocation ®@ Government bonds ® Investment grade corporate bonds ® High yield ® Overseas (hedged back to Sterling) _ Utilises Fidelity’s multi-strategy approach $&P AA rated 48
Slide 49: Fidelity Fixed Income Funds performance
Fidelity Fixed Income Funds Fidelity MoneyBuilder Income UK Corporate Bond sector 5 Years Since Launch Fidelity Extra Income UK Other Bond sector 5 Years Since Launch Source: Fidelty/S&@P as at 1 November 2005 on bid-b with net income re-ewested Ta _ Aidelity Retirement Panning MasterClass ©3 Fideli
Slide 50: Fidelity MultiManager Portfolios
wh Dik Dea Del De Fidelity MultiManager Portfolios __ idetty Retirement Ptanning MasterClass 50
Slide 51: Fidelity MultiManager Portfolios
Fidelity MultiManager Portfolios Ideal vehicle for income drawdown and Diversified growth to suit risk attitude Fidelity MultiManager Income Portfolio Fidelity MultiManager Growth Portfolio Other Cash 2.7% 0.8% Far East Equity 6.2% Japan Equity 5.7% 51
Slide 52: Key features of Fidelity's MultiManager process
Key features of Fidelity’s MultiManager process ks ks Jes _ Select high performance, uncorrelated funds in a consistent, risk- adjusted manner _ We do not undertake significant geographic allocation bets _ Lifetime solution for pre & post retirement investing 52
Slide 53: Performance of Fidelity MultiManager Income
Performance of Fidelity MultiManager Income fone 8 e | Fidelity MultiManager Income 6 months 1 Year 8 at 7 November 2005 on bra-tud Dears wilh nef noone reinvested _ Fidelity Retirement Planning MasterClass Cautious Managed Sector Since Launch © Fidelity~ 53
Slide 54: Performance of Fidelity MultiManager Growth
Performance of Fidelity MultiManager Growth Fidelity MultiManager Growth 6 months 1 Year P as at 7 November 2005 ov bra-tus Deas wilh net moane re-invested Fidelity Retirement Planning MasterClass Active Managed Sector Since Launch © Fidelity 54
Slide 55: The FundsNetwork SIPP provided by Standard Life
The FundsNetwork SIPP provided by Standard Life fone ee | _ Access to all Fidelity funds _ Flexible charging and commission _ Income drawdown facility — Planning tools _ Funds bought at NAV (wrapper charge only) 55
Slide 56: Massive opportunity
Massive opportunity Increased need for retirement advice Life expectancy more important than retirement date Critical that assets don’t run out Focus on investment issues - Asset allocation - Size of ‘retirement fund’ - Withdrawal rates WHIT = 5 Aadeliy Retirement Ptanning MasterCiass . we 56
Slide 57: Compliance information
Compliance information The research and analysis used in this presentation is gathered by Fidelity for its use as an investment manager and may have already been acted on for its own purposes. Market performance data is based on Fidelity’s own figures unless otherwise stated. Third party trademark,