Total estimated assets, which include the assets of self-managed superannuation funds and the balance of life office statutory funds, rose by $47.4 billion (3.6 per cent) to $1.38 trillion over the 12 months to 31 March 2012, taking into account an increase of $73.2 billion (5.6 per cent) in total assets over the March quarter.

Over the March quarter, the total estimated assets of industry funds increased by 7.3 per cent ($17.9 billion) to $264.5 billion, corporate funds’ assets by 6.4 per cent ($3.4 billion) to $57.0 billion, public sector funds’ assets by 6.3 per cent ($12.9 billion) to $218.1 billion and retail funds’ assets by 5.2 per cent ($18.8 billion) to $376.9 billion.

Contributions to funds with at least $50 million in assets over the March quarter were $20.1 billion, with employers contributing $16.9 billion and members contributing $3.1 billion. Other contributions, including spouse contributions and government co-contributions, totalled $137 million.
During the March quarter, industry funds received 32.6 per cent ($6.6 billion) of total contributions, public sector funds 32.1 per cent ($6.5 billion), retail funds 31.1 per cent ($6.3 billion) and corporate funds 4.3 per cent ($872 million).

Outward rollovers exceeded inward rollovers in the March quarter, with negative net rollovers of $17 million, $342 million, $698 million and $839 million for industry, corporate, public sector and retail funds, respectively.

The combined rate of return for the March quarter was 5.4 per cent. The rate of return for corporate funds was 5.5 per cent, industry funds 5.4 per cent, retail funds 5.3 per cent and public sector funds 5.3 per cent.

To read the full report, click here.

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While recent research from Standard & Poor’s (S&P)1, announced this week, shows that most active Australian equities managers are failing to beat the index, Aviva Investors is one of the few managers to deliver outperformance over 1, 3 and 5 years.

S&P’s research found that for the five years to December 2010, more than 70 per cent of actively managed Australian equity funds underperformed the S&P/ASX 200 Accumulation Index.

The short-term figures were equally unsettling for investors: 81 percent of actively managed Australian equity funds underperformed the S&P/ASX 200 Accumulation Index in the year to end-December 2010.

Conversely, all of Aviva Investors’ actively managed Australian equities funds that have a 5-year track record have significantly outperformed their benchmarks over the 3 years and 5 years to December 2010.

In addition, Aviva Investors’ short-term performance numbers are also impressive with every fund significantly outperforming their benchmarks in the 12 months to December 2010.

“For many investors, it is clearly disappointing to hear that they are paying active fees to their investment manager to not even meet the index, never mind outperform it,” said Aviva Investors Head of Equities Glenn Hart.

“At Aviva Investors we are proud to say that we have delivered excess returns to our investors over both the long-term and the short-term. We do not believe that investors should have to choose between either short-term or long-term outperformance and have shown that the right manager can deliver both.”

Mr Hart said that this investment outperformance has been achieved by focusing on quality, in-house research.

“We believe markets are inherently inefficient and this results in stocks sometimes trading away from their underlying valuation for a period of time. We seek to exploit these mispricing opportunities by looking for stocks which are out of favour with the market.

“Our decision to invest is based on a detailed bottom-up analysis of the company’s future prospects, in which we have formed an in-house valuation which is significantly different to the consensus. We believe that adherence to this approach should produce consistent outperformance of the benchmark over the medium-to-long term in all but extreme market conditions.”

Professional Selection Australian Equities – Strong outperformance as at 31 December 2010

Investment returns are based on exit to exit prices of Professional Selection units, are net of management fees and assume reinvestment of all distributions. Past performance is not a guide to or indication of future performance.

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Underlying profit is AMP’s preferred measure of profitability as it removes some of the
impact of investment market volatility and is the basis on which the Board determines the
dividend payment.

Net profit attributable to shareholders was A$425 million, up 17.4 per cent from
A$362 million in June 2009.

The interim dividend has been set at 15 cents per share, 60 per cent franked with the
unfranked amount being declared conduit foreign income. The interim dividend represents a
payout ratio of 81 per cent of underlying profit.

At 30 June 2010, AMP’s regulatory capital resources above minimum regulatory
requirements (MRR) were A$1.4 billion, up from A$1.2 billion at the end of December 2009.
AMP’s performance against key measures was as follows:

Underlying return on equity: 27.4 per cent, compared to 31.6 per cent for 1H09, reflecting
a prudent approach to capital management.

Underlying profit: A$383 million, up 4 per cent.

Growth measures: AMP Financial Services net cashflows A$584 million, down from
A$865 million; AMP Capital Investors external net cashflows A$1.9 billion, up from
A$0.2 billion; value of new risk insurance business A$45 million, down A$2 million.

Investment performance: 64 per cent of funds under management met or exceeded
benchmarks in the 12 months to 30 June 2010.

AMP Chief Executive Officer Craig Dunn said the company’s solid result was bolstered by
robust core business performance, with disciplined cost control, profit margins holding up
well and building sales momentum from investment in growth initiatives.

“Our growth initiatives gained real traction in the half as we’ve moved decisively and
proactively to position ourselves well for the future.

“We have successfully introduced a fee-for-service model across our Australian planner
network well ahead of the industry, launched a market-leading product range that appeals to
a broader customer base, built on our expanded presence in Asia and introduced more
distribution channels, including a bigger presence in the IFA market.

“Customers of AMP Financial Services today can expect simpler, more transparent products,
designed and priced to suit most pockets, and offered by more professional financial
planners increasingly operating in a no-commission, fee-for-service environment,” Mr Dunn
said.

While continuing to invest in the business, the cost to income ratio fell slightly, by
0.2 percentage points, to 42.2 per cent while total costs increased by three per cent to
A$426 million, compared with the first half 2009.

Business unit performance

AMP Financial Services (AFS)

AMP Financial Services’ operating earnings increased five per cent to A$323 million
compared with first half 2009, demonstrating the resilience of this business and reflecting
higher fees because of higher AUM levels.

Controllable costs fell slightly in the half to A$261 million, compared with A$264 million in the
first half of 2009 resulting in a cost to income ratio of 33.6 per cent, an improvement from
35.0 per cent in the first half of 2009.

Significant achievements included reshaping the business through the removal of in-built
commissions from all new superannuation, pension and investment products, and the launch
of the market-leading AMP Flexible Super product range. Since its May launch, AMP

Flexible Super has delivered net cashflow of over A$260 million and now has total AUM of
over A$330 million.

These changes position AMP well, putting the company ahead of the regulatory curve and
other industry reforms. Importantly, these changes also broaden AMP’s appeal to new
market segments.

AMP planners are an increasingly productive and diverse advisory force with Australian AMP
planners more productive than the industry median and 11 years younger than the average
planner across the industry.

In Australia for the 12 months ending 31 March 20102, AMP Financial Planning was ranked
as the largest financial planning group by planner numbers and grew its planner numbers
faster than the industry over the same period.

Pleasingly, total AFS planner numbers remained relatively flat, falling by only 23 in the half to
June 2010 to 2,105, despite the very significant change program being driven through the
business.

In Contemporary Wealth Management, which includes the financial planning,
superannuation, pensions and banking businesses, operating earnings increased
16 per cent to A$150 million, as a result of higher investment related revenue linked to
higher AUM, and lower controllable costs.

Controllable costs fell by 3.6 per cent on the first half of 2009, with the cost to income ratio
falling to 41.7 per cent, which is the lowest cost ratio ever achieved by this business.
Return on equity remained high at 40.8 per cent, down from 42.0 per cent for the period to
June 2009, reflecting an increased capital base.

The average AUM for the half was A$51.5 billion compared with A$42.6 billion for the same
period in 2009. This reflects higher investment markets over the first half of 2009 along with
ongoing positive net cashflows. While discretionary cashflows remain subdued, there has
been good momentum in the new AMP Flexible Super product and Personalised Portfolio
service.

AMP Bank contributed operating earnings of A$21 million, up from A$18 million for the first
half of 2009. While deposits were strong, the operating environment was characterised by a
slow-down in home loan demand across the industry, as well as ongoing funding constraints
for second tier banks.

In Contemporary Wealth Protection operating earnings were down 12 per cent to
A$73 million from A$83 million for the first half of 2009. This reflects the ongoing incidence of
higher than usual income protection claims, consistent with a difficult economic environment,
along with an increase in life insurance claims.

Good sales momentum saw profit margins increase by nine per cent on the first half of 2009
to A$76 million and individual risk API increase by nine per cent to A$616 million over the
same period. This reflected increased consumer demand for risk protection products in an
uncertain economic environment, along with increased distribution through IFAs.

The cost to income ratio rose to 26.8 per cent, up from 21.9 per cent for the same period in
2009, reflecting the effect of less positive claims experience on operating earnings and an
increased investment in business and product development to grow sales, particularly
through IFAs. Sales in the IFA and alliances channel grew by 17 per cent on the first half
2009.

The return on equity for this business unit was 24.7 per cent, down from 31.7 per cent for the
six months to June 2009 reflecting lower operating earnings and an increase in capital
allocated to support new business growth.

The Mature business contributed operating earnings of A$68 million, down six per cent on
the first half of 2009.

The Mature business is one of Australia’s largest closed life insurance businesses with AUM
of A$17.6 billion compared with A$18.1 billion at the end of December 2009. The key
priorities for this business unit are to maintain capital efficiency, improve persistency
(customer retention) and improve cost efficiency.

Persistency remained broadly flat at 89.4 per cent for the six months to end of June 2010.
Costs also stayed broadly flat at A$28 million resulting in a cost to income ratio of
20.2 per cent.

The return on equity for the Mature business was strong at 35.5 per cent, although down
from 45.5 per cent for the six months to the end of June 2009, as a result of an increase in
capital allocated to support capital guaranteed products given ongoing volatility in investment
markets.

The New Zealand business contributed operating earnings of A$32 million, an increase of
39 per cent on A$23 million for the first six months of 2009.

This increase reflected lower controllable costs and a A$10 million turnaround in experience
profits, owing to better claims experience, improved lapse experience and recent changes to
the New Zealand corporate tax rate.

Profit margins were down by A$1 million to A$28 million, driven by increases in lapse rate
assumptions on risk products recognised as at December 2009 and lower margins on new
business owing to life tax changes.

Tight cost control in the New Zealand business saw controllable costs decrease to
A$24 million from A$27 million for the six months to June 2009.

The return on equity of this business unit was 25.1 per cent up from 20.5 per cent for the
six months to June 2009, reflecting higher operating earnings.

AMP Capital Investors

AMP Capital Investors contributed operating earnings of A$44 million, up slightly from
A$43 million for the six months to June 2009, representing a solid performance through
volatile market conditions.

Total AUM remained flat at A$95 billion reflecting strong external net cashflows that were
offset by negative investment returns from falling investment markets.

The Asian region contributed A$1.1 billion in external net cashflows, building on the success
of AMP Capital’s Japanese business.

Investment performance improved with 64 per cent of AUM either meeting or exceeding
investment benchmarks over the 12 months to 30 June 2010.

The return on equity for AMP Capital Investors was 50.4 per cent, down from 56.6 per cent
for the six months to June 2009, reflecting a higher capital base as internal debt used to part
fund seed pool investments has been replaced with equity.

Costs increased by 10.6 per cent to A$136 million compared with A$123 million for the
six months to June 2009. The cost to income ratio was 67.7 per cent, up from 65.3 per cent
for the same period in 2009.

The increase in costs was driven by investment in Asian expansion and operating platforms
that will improve business scalability, particularly as the business increases its off-shore
presence. It will also enable better risk management and improved investment performance.

Capital management

The dividend policy remains to target a dividend payout ratio of between 75 to 85 per cent of
underlying profits. The interim dividend of 15 cents will be 60 per cent franked.

The future franking rate is dependent on improved markets lifting taxable profit, which
generates franking capacity. As markets stabilise and the outlook improves, taxable profits
are likely to increase, enhancing AMP’s franking capability.

Shareholders will be invited to participate in the dividend reinvestment plan which will be
offered at a discount of 1.5 per cent.

AMP continues to take a dynamic and prudent approach to capital management, preferring
to hold more capital than less, given the continued market volatility, and until changes to
APRA’s regulatory capital framework become clearer.

At 30 June 2010, AMP’s regulatory capital resources were A$2.4 billion and were
A$1.4 billion above minimum regulatory requirements (MRR), up from A$1.2 billion above
MRR at the end of December 2009.

Group gearing remains low, at 15 per cent on an S&P basis, while underlying interest cover
is high at 12.3 times.

Outlook

Mr Dunn said that while AMP retains a reasonably positive economic outlook for Australia
and the Asian region, it continues to be cautious about the global economic outlook,
expecting ongoing market volatility and subdued investor confidence.

AMP remains one of the most efficient providers of wealth management in Australia with a
business model that allows significant flexibility to respond to changing consumer demands
and the changing regulatory landscape.

“We’ll continue to act proactively and decisively to reposition the company for growth,
capturing the opportunities that will flow from the changing wealth management market and
our targeted expansion into Asia.

“We’ll use our business strength and flexibility to continue investing in targeted growth
initiatives, while delivering robust financial returns,” Mr Dunn said.

Below are AMP Limited’s Q2 cashflows and AUM for the quarter ending 30 June
2010.

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