Centuria Perspectives Update December 2013

Perspectives December 2013

Performance Update In our Investment Bond Review of September 2013 we reported excellent returns for the Centuria Unit-Linked Bonds for the financial year ending 2012/13. We are very pleased to report that the strong performance of your Unit-Linked Bonds continues.

The table below shows both the returns for the financial year ending 30 June 2013 and the year to 31 October 2013.

These returns are quoted net of tax and fees.

Year to 30 June 2013

Year to 31 October 2013

Australian Shares Bond

16.54%

20.79%

Balanced Bond

12.07%

14.65%

Growth Bond

10.82%

15.10%

High Growth Bond

17.15%

21.34%

Past performance is not an indicator of future performance.

We have delivered this performance through careful and astute management. This is also evident when comparing the performance of our Unit-Linked Bonds as at 31 October 2013 to our peers.

3 months

1 year

2 years

3 years

Australian Shares Bond (Large Blend)

1/36

3/36

1/36

1/36

Balanced Bond (Multisector Growth)

2/80

9/80

4/80

4/80

Growth Bond (Multisector Growth)

3/80

6/80

27/80

39/80

High Growth Bond (Multisector Aggressive)

1/20

1/20

2/20

1/20

Source: Morningstar Direct.

The Balanced Bond is classified as a “Multisector Growth�option by Morningstar.

This table shows that there are 80 other Investment Bond options available in this category. Based on the 3 year performance to 31 October 2103, the Centuria Balanced Bond ranked fourth out of 80 options.

The current asset allocation (as at 31 October 2013) for each Bond is detailed below.

Cash

Australian Fixed Interest

Australian Shares

International Shares

Property

Alternative Assets

Australian Shares Bond

7.59%

-

92.41%

-

-

-

Balanced Bond

11.47%

17.11%

46.90%

16.64%

7.88%

-

Growth Bond

5.07%

14.71%

48.59%

-

25.89%

5.74%

High Growth Bond

6.21%

-

59.19%

21.50%

13.10%

-

Capital Guaranteed Bonds Your Capital Guaranteed Bonds continue to perform well. The headline performance for the Income Accumulation Bond for 2013 was 5.3%, while the Capital Guaranteed Bond returned 5.85% before tax and fees. However the increased reserving imposed by the Australian Prudential Regulatory Authority (APRA) impacted the performance of these Bonds.

The performance of our Capital Guaranteed Bonds is constrained by factors that are outside our control. These factors are explained in more detail below.

Interest rates In order to provide a capital guarantee, the investment rules for both the Income Accumulation Bond and the Capital Guaranteed Bond restrict the types of assets these Bonds can invest in. These investments are mainly limited to fixed interest and cash. This means the performance of these Bonds is subject to the prevailing level of interest rates within the Australian economy. Falling interest rates have impacted returns of the assets in the guaranteed bonds.

For example, in early 2010 it was possible to lock in a three year term deposit at 7.25% p.a. That same term deposit today will return around 4% p.a. for a three year term.

Increased APRA reserving requirements APRA has now introduced significantly more stringent reserving requirements, which have the effect of increasing the amount of reserving we must set aside to support the capital guarantee. This works to reduce the bonus that we are able to credit to your Bond.

Taxation The Bonds are taxed at a maximum headline rate of 30% (the company tax rate).

Our Unit-Linked Bonds have a lower effective tax rate if they invest in Australian shares and benefit from any franking credits that apply.

Flexibility to switch You can switch between our Unit-Linked and Capital Guaranteed Bonds at any time at no cost and without impacting your 10 year tax period. If your views or circumstances change you can easily move between Bonds that have a different risk profile without any personal tax consequences.

You should read the Unit-Linked Bonds and Capital Guaranteed Bonds Product Disclosure Statements to understand the different profile of each bond before you make a decision to switch.

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To assist us in delivering timely information to you, please provide your email address on the back page and return this section in the self addressed envelope enclosed.

Or you can contact our Investor Services and inform them directly.

If you respond to us by 23 December, you will go into the draw to receive one of five wonderful hampers.

For more information about your Centuria Investment Bond, please contact Investor Services on 1300 50 50 50. © 2013 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information atwww.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance.

To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under license from ASX Operations Pty Ltd ACN 004 523 782 (“ASXO”).

Important: This overview is issued by Centuria Life Limited (Centuria) AFSL 230 867, ABN 79 087 649 054. It contains general information only and does not take into consideration any person’s objectives, financial situation or needs. These should be considered before any investment decision is made. To obtain a copy of the Product Disclosure Statement for the Centuria Investment Bonds, please call 1300 50 50 50. The Product Disclosure Statement should be considered before making an investment decision.

Past performance is not indicative of future performance.

Centuria believes that the information contained in this communication is accurate, but makes no representation as to its accuracy or completeness. To the maximum extent permitted by law Centuria excludes liability for any loss or damage arising from use of the information contained in the communication. Unless otherwise stated, performance and asset allocation data in this document is current as at 2 December 2013.

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