Investment option update

_______________________________________________________________________

Australian Fixed Interest Index

30 June 2010

Aim and strategy: To provide exposure to the performance of the UBS Composite Bond Index. It
is designed to generate a return equal to the index return.
The index return provided is independent of the investment manager’s performance. It is subject to
risks including general market risk of the index, impacts of interest rate and credit spread movements
on the prices of individual bonds comprising the index, and exposure to credit defaults of issuers
whose bonds comprise the index.
The investment also enters into a swap arrangement with a counterparty. Under the swap, if the
underlying investment outperforms the index, the counterparty receives the outperformance, however,
if the underlying investment underperforms the index, the counterparty will compensate the investment
for the underperformance. The investment option is currently managed by Macquarie Investment
Management Limited.

Investment option performance*

To view the latest investment performances please visit www.amp.com.au

Investment option overview

Top 10 Securities
Investment category Fixed Interest – Core
Exposure %
Fixed Interest
ST GEORGE 5.90
Suggested investment 3 years MACQ OFFICE FINANCE 5.02
timeframe
SUNCORP METWAY 4.63
Relative risk rating Low MG WHOLESALE CMBS 4.58

Investment style Index style MORGAN STANLEY 4.58

ANZ 4.34
ANZ 4.15
Benchmark Range JP MORGAN 4.04
Asset Sector (%) (%)
GE CAPITAL 4.03
Fixed interest securities and 100 0-100
cash WESTPAC 3.53

Credit Rating Exposure %

AAA 24.5
AA 44.0
A 23.3
BBB 8.2
Sub-Investment Grade -
Other -
Cash -

* Past performance is not a reliable indicator of future performance www.amp.com.au

 Investment option update
_______________________________________________________________________

Market commentary

Risk markets were under pressure again, with sovereign issues continuing - Greece getting
downgraded and taken out of most global indices - and with global economic data disappointing
markets. Central banks continue to signal that they will be keeping rates lower for longer and more talk
emerged of a double dip scenario with the possibility of a restart of the quantitative easing programs in
the US and an expansion of these programs in Europe. Locally the RBA left rates on hold in June as
expected, signalling that the CPI number of Q2 would be the trigger for future rate decisions. The
change in the prime minister of Australia was received positively by markets, with the expectation of
favourable amendments to the Resource Super Profit Tax to appease the Australian mining
companies.

The month of June saw some dislocations across the government and semi government bond curves,
driven by offshore flows in a less liquid than usual market due to financial year end and general fears
of a double dip recession in Europe and the US. As a consequence, we had higher than usual trading
activity in relative value strategies to take advantage of these opportunities.

Investment option commentary

The Fund performed in line with the Index in the month of June with the primary contributor to
performance being its stock selection. Duration management detracted from performance.

The main driver of performance in government bonds was from having no holdings in the shortest
dated government bonds out to April 2012's. This security underperformed the bond curve by around
25bps and the 2011 maturity underperformed by 50bps. We used this weakness to shorten down the
yield curve out of our November 2012 holdings which did perform strongly. By the end of June, all
maturities out to May 2013 traded at yields below the cash rate.

In semi governments, we were overweight maturities longer than 2018 and shorter than 2012 versus
the middle of the curve which was beneficial. Very long dated and very short dated issues tightened
versus governments over the period, while mid curve semi's widened by as much as 10bps. 2014 and
2016 unguaranteed issues performed the worst, and we took advantage of this by selling government
guaranteed QTC 2015's into unguaranteed QTC 2014 and QTC 2016's.

In the beginning of the quarter we traded duration mainly from the long end given our views that the
RBA was close to pausing and that the sovereign debt crisis was intensifying. This position added to
performance. Halfway through the quarter we started to trade the market from the short side as we
were of the view that the RBA would keep rates on hold in the short term and would start hiking again
towards the end of the year with no intention to cut rates. We expressed this view by being short 3
year futures and by entering into a bill steepener position. We closed the short duration position
towards the end of the quarter, as the loosening of the Chinese currency gave the markets some
relief. However, markets soon dismissed the news and started trading in 'risk aversion' mode again
and as a result, bonds started to rally firmly, and the bill steepener detracted from performance.

Outlook
Going forward we expect markets to remain volatile. Global funding problems will remain an issue
going forward, keeping a lid on global rates and credit spreads elevated. The Australian market should
remain highly correlated with global markets, making it unlikely that the RBA will hike in the short term.
However, we are still positive about Australia and foresee higher rates in the medium term. We
perceive the loosening of the Chinese currency and the continuation of the commodity boom to have a
positive effect on Australia and to keep inflation pressure contained for now.
 Investment option update
_______________________________________________________________________

Contact us
Web www.amp.com.au
Phone 133 267 - Monday to Friday 8.00am to 8.00pm EST
Email askamp@amp.com.au

What you need to know

This publication has been prepared by AMP Life Limited ABN 84 079 300 379, AFSL No. 233671 (AMP Life). The information contained in this
publication has been derived from sources believe to accurate and reliable as at the date of this document. No representation is given in relation to
the accuracy or completeness of any statement contained in it. Whilst care has been taken in the preparation of this publication, to the extent
permitted by law, no liability is accepted for any loss or damage as a result of reliance on this information. AMP Life is part of the AMP Group. In
providing the general advice, AMP Life and AMP Group receives fees and charges and their employees and directors receive salaries, bonuses
and other benefits.

The information in this document is of a general nature only and does not take into account your financial situation, objectives and needs. Before
you make any investment decision based on the information contained in this document you should consider how it applies to your personal
objectives, financial situation and needs, or speak to a financial planner.

The investment option referred to in this publication is available through products issued by AMP Superannuation Limited ABN 31 008 414 104,
AFSL No. 233060 (ASL) and/or AMP Life. Before deciding to invest or make a decision about the investment options, you should read the current
Product Disclosure Statement for the relevant product, available from ASL, AMP Life or your financial planner.

Any references to the “Fund”, strategies, asset allocations or exposures are references to the underlying managed fund that the investment option
either directly or indirectly invests in (underlying fund). The investment option’s aim and strategy mirrors the objective and investment approach of
the underlying fund. An investment in the investment option is not a direct investment in the underlying fund.

Neither AMP Life, ASL, any other company in the AMP Group nor underlying fund manager guarantees the repayment of capital or the
performance of any product or particular rate of return referred to in this document. Past performance is not a reliable indicator of future
performance.