Investment Returns

INVESTMENT RETURNS

Investment performance of the Trustee Option

This table shows the Trustee Option's annual effective rate of net earnings and rate credited to members' accounts over the past ten years.

Year ended 30 June	Rate credited to Main, Rollover and Spouse section accounts %	Rate credited to Pension section accounts %
2011	7.5	8.5
2010	8.3	8.3
2009	-11.2	-11.2
2008	-3.2	-3.2
2007	12.5	13.5
2006	12.0	13.25
2005	14.5	16.0
2004	11.0	12.0
2003	4.5	5.0
2002	3.15	3.65
5-year compound average p.a.	2.4	2.8
10-year compound average p.a.	5.6	6.3

During the year ended 30 June 2011 the earnings rates allocated for the Trustee Option were:

01/07/2010 - 31/12/2010	8.8% p.a.	(4.4% for 6 months)
01/01/2011 - 30/06/2011	5.9% p.a.	(2.9% for 6 months)

The compound effect of applying 8.8% p.a. for 184 days and 5.9% p.a. for 181 days is 7.5% for the year.

Investment strategies vary significantly between funds and investment options. The Trustee Option has a history of providing good returns from a conservative investment strategy with lower exposure to shares, than most others. However, you should be aware that past performance is not a guide to future performance. The average increase in the CPI for the 5 years ended 30 June 2011 was 3.0% p.a.

Investment performance of the High Growth Option

The High Growth Option was invested in the Vanguard High Growth PST from 31 January 2009 until September 2010. The investment returns achieved by that fund (net of fees and tax) prior to 31 January 2009 are set out below. You can compare these returns with those achieved by the Fund's Trustee Option as shown above. The actual return to MIESF members from 31 January 2009 onwards reflects the cost of buy/sell spreads incurred by MIESF and the impact of cash flows into and out of the investment option. The return since September 2010 arises from the investment into the Vanguard High Growth Index Fund.

Please note that past performance is not a reliable indication of future performance.

Year ended 30 June	Investment Return (%)
2011	9.5
2010	10.6
2009	-16.1
2008	-13.7
2007	18.4
2006	19.3
2005	14.6
2004	17.2
2003	-3.6
2002	-6.5
5-year compound average p.a.	0.8
10-year compound average p.a.	4.1

The investment return achieved by the Fund's High Growth Option was 4.3% for the 5 months from 31 January to 30 June 2009. Members who switched from the Trustee Option to 100% High Growth Option on 31 January 2009 achieved a return of -5.8% for the year ended 30 June 2009.

During the year ended 30 June 2011 the earnings rates allocated for the High Growth Option were:

01/07/2010 - 31/12/2010	17.1% p.a.	(8.6% for 6 months)
01/01/2011 - 30/06/2011	1.6% p.a.	(0.8% for 6 months)

The compound effect is 9.5% for the year.