Our investment philosophy

Our investment strategy is largely uncomplicated. We invest in what we know, collectively with the skills and experience of our investment managers and consultants. We don’t invest in things simply because everyone else is doing it or it’s the flavour of the day.

 

We’re not a for-profit fund and we’re not subsidised or funded by any other organisation, so we’re careful how we spend the money we collect from your member fees, which is one of the reasons our investment menu remains relatively small, with eight options. Each time we add to that, it becomes more expensive and that cost ultimately impacts our members.

Our chief investment officer explains this further: “To put it simply, we have to be able to explain our investments to members and why they make sense for our fund. If it’s too complex, or if our response is that everyone else was doing it, then that’s not good enough. Keeping our approach simple is one way to help us stay focused on what we want to achieve for our members.”

 

Some of the beliefs that are important to us when investing

  • We don’t do things we don’t understand, or that we can’t explain to members
  • Select skilled investment managers
  • Choose the right mix of assets and consider the importance of their liquidity
  • Diversify to manage investment risk
  • Not being worried about how other funds and peers are investing
  • Returns require risk but risk doesn’t guarantee positive returns
  • Environmental, social and governance factors influence long-term outcomes
  • Costs matter and need to be effectively managed

 

Investing for growth but also protecting the downsides

We don’t lose sight of the fact that we want to generate good returns to help you save more for your retirement – after all, as a super fund, that’s the business that we’re in. But we also don’t take lightly the importance of being a little more conservative in order to help protect the super you’ve already built up, particularly in times of poorer market performance.

With investment returns, comparing Fund A with Fund B can be common but there can be dangers in doing this simply based on numbers.

One of the key drivers of returns relates to the amount of risk different funds and trustees are prepared to take to achieve their investment objectives.

An important part of our investment philosophy is delivering reliable long-term returns that achieve the investment objective that we set for each option.

Focussing on meeting objectives rather than peer comparisons means we can aim to give you more certainty around your likely returns, which helps you choose the right investment options to suit your needs.

We also invest with the aim of lower downside risk where possible, so the exposure to share/equity markets for our diversified options is generally lower than many other funds.

In taking this position, we would generally expect our returns to be lower compared to other funds in times when share markets produce higher (absolute) positive returns, but perform better when share markets have larger downturns. We have seen this with our longer-term returns (that have taken into account the GFC period, for example) where our more defensive positioning continues to result in strong comparative performance with other funds, while our shorter term returns are less comparable in a relative sense.

On balance with returns, we also strive to keep our fee structure among the lowest across Australian super funds to try to deliver the best overall net effect to members, taking into account both returns and fees, that we can.

While a crystal ball for the future is impossible, given the current Australian cash rate and global interest rates we expect that it will be difficult for investment markets to sustain the higher absolute returns experienced over the last few years. With this in mind, we are comfortable that our investment beliefs and strategies will continue to deliver the right outcomes for our members over the long term.

Important note: You should remember that returns are not guaranteed and may be positive or negative. Past investment performance is not a reliable indicator of future performance.