What we invest in
We invest in a diverse portfolio of assets across our options.
We invest on your behalf across all major asset classes.
We invest your super in many different types of assets, such as shares, fixed interest, cash, property and infrastructure. These assets can increase in value over time and often pay regular dividends. This helps your super grow.
Asset classes we invest in
We often group similar financial or physical assets into asset classes. All asset classes have different levels of risk and expected return.
Below is an overview of the most common asset classes we invest in.
When you invest in shares (also known as equities), you’re actually buying a share of a company that can be traded on a stock exchange. You can access small and large companies across a range of industries in Australia or overseas. Shares provide gains or losses through changes in their price on the stock exchange and income through dividends. Shares are regarded as a high-risk investment with the potential for short-term negative returns. However, they also have the potential for higher returns than most other asset classes over the long term.
Infrastructure involves investing in assets that provide essential public facilities and services such as roads, airports, seaports and power generation and distribution in Australia and overseas. This investment primarily involves exposure to unlisted companies or assets. Relative to shares, infrastructure tends to have a slightly lower risk and return profile. Although returns should be less volatile than listed share investments, infrastructure may also produce negative returns.
Property investments include exposure to both directly held property assets as well as investment pools that own commercial office buildings, large retail shopping centres and industrial buildings. Property provides income in the form of rent, and the value of the assets can increase or decrease over time. Property is generally regarded as a medium to high-risk investment, depending on the characteristics of the underlying assets. Generally, property investments provide higher returns than fixed interest or cash in the long term, but may incur negative returns in certain market conditions.
Private equity involves investing in companies that aren’t listed on a stock exchange. Investments can include Australian and overseas companies across a wide range of industries and various stages of development, from early-stage venture capital and those requiring expansion capital to grow, through to management-supported buyouts. It aims to produce high long-term returns but is a high-risk asset class and may incur negative returns. Private equity is classified as a growth-orientated asset class and is likely to exhibit risks similar to those associated with listed shares over the long term.
Fixed interest involves investing in bonds issued by governments and corporations where a fixed or floating rate of interest is paid. These typically provide interest payments over the term of the security and the return of the amount invested at the end of the bond’s life. A floating rate security has a variable interest rate, whereas the interest paid by a fixed-rate security doesn't fluctuate. The bond’s value fluctuates during its lifetime in response to a variety of factors, including changes in market interest rates.
Our investment in fixed interest securities may include government and credit securities of both a fixed and floating rate nature. There may be exposures to high yield securities and direct lending from time to time, including infrequently traded debt securities that exhibit greater credit risk and higher expected returns than government bonds.
Capital gains or losses may also be incurred through movements in the price of fixed-interest investments, primarily arising from movements in interest rates and changes in credit risk. Fixed interest investments may provide higher returns than cash over the long term but may also have negative returns in certain market conditions.
Absolute return strategies cover a broad array of investments with exposure to a range of traditional markets including high-yield credit, shares and commodities as well as other more esoteric markets such as catastrophe insurance. The unique exposures of each investment, taken together, mean that this asset class is designed to be relatively defensive in nature overall.
Individual absolute return strategies can exhibit a mixture of growth and defensive characteristics; however, the aim is to control risk through lower market risk exposure and lower return volatility than if we were solely invested in shares. Absolute return strategies aim to generate higher returns than cash returns but may produce negative returns from time to time.
Cash is made up of bank deposits, including term deposits, and other short-term money market investments and cash instruments. Interest is generally received from cash investments. An investment in cash generally offers the lowest returns over the long run of any asset class, but also has the lowest risk. The purchasing power of cash is reduced over time as a result of inflation.
It’s also possible that returns on the cash asset class could be negative, in an environment where short term interest rates are very low or even negative. Cash investments are based on the official cash rate set by the Reserve Bank of Australia and represents the interest rate on unsecured overnight loans between banks.
We offer a range of investment options with different asset allocations to suit your investment objectives and goals.
Pre-mixed investment options
Our pre-mixed investment options invest across a range of asset classes and are built with the aim of achieving the option's specific investment return objective.
We offer six pre-mixed investment options:
- Balanced (MySuper) for super and Balanced for pension or Transition Pension members
- Long-term (available for Managed Pensions only)
Asset class investment options
Asset class investment options invest in a single asset class, as described in the investment option’s name. We offer four asset class investment options:
Investment objectives and asset allocations
Strategic asset allocation
Strategic asset allocation is the proportion of each of our options that’s invested in each asset class.
We set medium to long-term risk and investment return objectives for each of our investment options. We then set the strategic asset allocation for each investment option with the aim of achieving the option's investment return objective.
You can view the investment return objective and strategic asset allocation for each investment option.
Actual asset allocation
From time to time, the actual asset allocation may differ from the strategic asset allocation for the pre-mixed options due to market fluctuations, new investments and, irregular cash flow levels. Generally, we'll seek to rebalance the portfolio back to the strategic asset allocation. The actual asset allocations for all investment options are updated semi-annually and can be found with our portfolio holdings.
Valuation of assets
We value our investments regularly so we can process transactions at values that are fair and equitable for all.
For valuation purposes, our investments are divided into four categories as follows:
- listed and held directly
- listed and held indirectly (through a pooled vehicle)
- unlisted and held directly
- unlisted and held indirectly (through a pooled vehicle).
How we value assets will differ for each category. For example, listed assets held directly are generally valued at their closing price on the relevant market, while unlisted assets held directly are valued according to the methodology outlined in the Valuation policy.
Our Valuation policy provides the framework for our investment valuation process. It outlines our approach to valuation issues including instruction, frequency and review. The Valuation policy is central to our investment strategy and operations and is a key component of the unit pricing process and financial statements.
There is a risk that assets, especially unlisted assets, may not be able to be sold quickly without affecting the price of the asset. Under our Liquidity policy, we monitor and manage liquidity risk for our investments constantly.