Download Investment Guide - REST Industry Super

Investment
Guide
Effective 5 December 2016
The information in this document forms part of the Product Disclosure Statement (PDS) for REST Super,
REST Select and Acumen effective 1 October 2015 and REST Corporate effective 5 December 2016. You
should read the PDS in conjunction with this and other important information that forms part of the PDS.
Issued by Retail Employees Superannuation Pty Limited ABN 39 001 987 739 AFSL 240003
Retail Employees Superannuation Trust ABN 62 653 671 394
rest.com.au 1300 300 778
Contents
Why investment choice matters 3
How you choose to invest now can make a real difference
to your retirement
Risks of super – investment risk 4
REST’s flexible investment options, competitive fees
and quality support can help you make the right
investment choice
Fees and costs 14
The costs for managing your investment
5
Take a look at the different asset classes and
REST’s active management
Making your investment choice 9
Review how each REST investment option is managed,
its risks and objectives
Learn how investment risk can affect your super decisions
How we invest your money Investment options What you need to know about REST investments 15
Want to know more about REST investments?
Find your answers here
8
Investment managers 18
The people looking after REST’s investments
Terms explained 19
A glossary of investment terms
‘Investment Guide’ is incorporated by reference material which forms part of the ‘REST Super Product Disclosure Statement’ (PDS), REST
Select Product Disclosure Statement’ (PDS) and ‘Acumen Product Disclosure Statement’ (PDS) effective 1 October 2015 and ‘REST Corporate
Product Disclosure Statement’ (PDS) effective 5 December 2016. The relevant Member Guide, Insurance Guide including if applicable
‘Additional information on insurance’ and this ‘Investment Guide’ contain important information you should consider before making a decision
to invest in REST Super, REST Corporate, REST Select or Acumen.
The information in this document is general information only and doesn’t take into account your individual objectives, financial situation or
needs. Accordingly, before acting on the contents of the relevant PDS, you should consider whether it is appropriate to you, having regards to
your objectives, financial situation and needs. You should read the relevant PDS including the relevant Member Guide, Insurance Guide and if
applicable ‘Additional information on insurance’ and this ‘Investment Guide’ in its entirety before making any decision in connection with these
products. You may wish to consult a licensed financial adviser to obtain financial advice that is tailored to suit your personal circumstances.
If you are printing an electronic copy of the relevant PDS, you must print all pages of the relevant PDS and forms, this ‘Investment Guide’, and
the other important information that forms part of the PDS. For an electronic copy, please visit rest.com.au and click on ‘Forms & Publications’
to access the relevant PDS.
REST Super, REST Corporate, REST Select and Acumen are governed by a trust deed. As a member you will be bound by the terms of the
trust deed, which may be amended by the Trustee from time to time, subject to superannuation law. The trust deed provides for many of the
rights, duties and responsibilities of the Trustee, members, other beneficiaries and employers.
The information contained in the relevant PDS is up to date at the time of preparation. However, the Trustee reserves the right to change
the insurer and vary the benefits, insurance costs, procedures or terms and conditions from time to time. Some of the information may
also be subject to change, such as information about fees and other costs, or the investment strategy or asset allocations of a particular
investment option. From time to time there may be changes to non-materially adverse information which will be updated through member
communications, or on our website at rest.com.au/governance
Further information including a full paper copy of the relevant PDS, the trust deed, any non-materially adverse updates to information in
the relevant PDS and any other important information that forms part of the relevant PDS can be obtained free of charge on request by
contacting REST Customer Service:
Why investment choice matters
REST is an award winning industry super fund, with more than $39 billion in funds under
management*. With competitive long-term investment returns, we’re committed to
improving the retirement outcomes of our members throughout their lives.
Your super is one of the largest sums of money you’ll
have to manage. How you choose to invest it now can
make a real difference to your retirement in the future,
so it’s important you understand the basics of investing.
This guide is designed to give you information to help you
make an informed investment choice for your super.
By understanding the different asset classes, the risks of
investing, and the investment options available to you, you
can choose the strategy that you’re comfortable with. And,
it’s just as important that you understand the kind of investor
you are – how you feel about risk, your time horizon and your
retirement goals. These factors can change over time, so it can
be a good idea to review your investment strategy regularly.
At REST, we understand that members have different
needs and financial objectives. We offer 13 easy to
understand investment options, each with a differing
level of risk and potential return. You can choose one
investment option, or a mix of structured investment
options, or create your own portfolio from a range of
single asset class investment options.
If you are a member of REST Super or REST Corporate and
you don’t want to make a choice, or just need time to think
about your options, we will invest your savings in REST’s
Core Strategy (the MySuper investment option for REST
Super and REST Corporate). If you are a member of REST
Select or Acumen, you must choose an investment option
as there is no default option in these products.
Competitive long-term returns
REST is focused on delivering competitive returns over
the long term to help build members’ retirement savings.
REST’s Core Strategy investment option (the MySuper
investment option) is ranked number one for investment
performance when compared to similar options of other
super funds over 10 years*.
Phone: 1300 300 778 (8am to 8pm) Web: rest.com.au Mail: PO Box 350, Parramatta, NSW 2124
The above-mentioned PDSs have been issued by the Trustee company, Retail Employees Superannuation Pty Limited, Australian Business
Number (ABN) 39 001 987 739, Australian Financial Services Licence (AFSL) 240003, referred to in the PDS as ‘the Trustee’, ‘we’, ‘our’, ‘us’ or
‘REST’. REST Super, REST Corporate, REST Select and Acumen are products of the Retail Employees Superannuation Trust ABN 62 653 671
394 (The Fund).
The Trustee’s postal address is PO Box 350, Parramatta NSW 2124. The Trustee maintains professional indemnity insurance. REST is
administered by Australian Administration Services Pty Ltd, ABN 62 003 429 114 (AAS), referred to in the PDS as REST Customer Service.
REST Customer Service personnel are not representatives of the Trustee. Any general financial product advice given by REST Customer
Service personnel is provided by AAS.
The invitation to invest in this product is only available to persons receiving this product in Australia. It is not made, directly or indirectly,
to persons in any other country.
REST Super Unique Superannuation Identifier RES0103AU
REST Select Unique Superannuation Identifier RES0101AU
REST Corporate Unique Superannuation Identifier RES0103AU
Acumen Unique Superannuation Identifier RES0104AU
REST Super and REST Corporate’s MySuper Product Unique Identifier is 62 653 671 394 831
2
Advice when you need it
REST Advice is all about helping you make good decisions with your super and money. Whether you have simple
general questions, or you’re interested in more complex subjects, we can help you confidently look forward to a brighter
tomorrow.
And, our price promise means that we won’t charge you any extra for simple super questions. More complex retirement
advice will be capped at $395, which you can pay for out of your super. Comprehensive face-to-face financial planning
will cost more, but we’ll always talk to you about this first.
For more information visit rest.com.au/advice or call us on 1300 300 778.
*As at 30 June 2016. For more information about the awards won by REST, please go to rest.com.au/ourawards
SuperRatings Fund Crediting Survey – SR 50 Balanced (60-76) Index, June 2016. Ratings, awards or investment returns are only one factor that
you should consider when deciding how to invest your super. Past performance is not an indicator of future performance.
#
Investment Guide | 3
Risks of super – investment risk
All investments have some level of risk. Super funds
generally invest in a range of asset classes – for example,
cash, bonds, property and shares – that have different
levels of risk. The likely investment return, and the risk of
a negative return, is different for each investment option
depending on the underlying mix of assets in the relevant
investment option.
Assets with the highest potential return over the longer
term (such as shares), generally also have the highest risk
of negative returns over the short-term.
REST offers a number of different investment options with
different levels of risk.
Risk and return
Risk is typically measured by how much investment
returns are likely to vary up and down in a given period.
Return comprises any income an investment earns, and
any increase (or decrease) in the capital value of the
investment. Your total return can be positive or negative.
You accept the rewards but also the risk of your
investment choice.
What is the Standard Risk Measure?
The Standard Risk Measure is a guide as to the likely
number of negative annual returns expected over any 20
year period. The purpose of the Standard Risk Measure is
to provide members with a guide to comparing investment
options both within and across various superannuation
funds. The tables on pages 10 to 13 provide the Standard
Risk Measure for each investment option offered by REST.
Commonly, the higher the volatility, the riskier the option.
That’s why, over the long run, your timeframe is perhaps
the most critical component in planning your investments.
Members need to ensure they are comfortable with the
risks and potential losses associated with their chosen
investment options.
The estimates provided by REST for our various investment
options are calculated using a number of assumptions
about how investment markets are forecast to perform,
how much fluctuation in returns there is likely to be and
how different asset classes are related.
These assumptions are not guaranteed and may
change from time to time. A detailed explanation of the
methodology and approach used is available on our
website at rest.com.au/srm
The standard risk measures are produced in accordance
with the Standard Risk Measure guidance issued jointly
by The Association of Superannuation Funds of Australia
Limited and Financial Services Council in July 2011.
What is the Standard Risk Measure telling us?
The Standard Risk Measure calculates risk in terms of the
likelihood of achieving a negative return in any one year
ie it describes expected volatility in investment markets
which is actually just one way that you could think about risk.
4
There’s no such thing as not taking any risk. The type and
degree of risk will vary depending on the investments you
choose. Every investment holds some level of risk. Only you
know how much risk you’re comfortable with.
What’s important is that you find the right balance of risk and
reward to help you meet your long-term goals, regardless of
what happens in the short-term. Your risk tolerance depends
on several factors, including your age, when you’ll need your
money, your financial needs and your assets.
The risk measure helps highlight the probability of the
number of negative annual returns over a 20 year period.
The expected chance of loss is on a before tax basis not
taking into account imputation credits, and is before
administration fees, but after taking account of investment
management fees.
The Standard Risk Measure is not a complete assessment
of all forms of investment risk. For example it will not
predict when market declines will happen, or, how long a
decline will last. Importantly, it does not detail what the
size of a negative return could be or take into account
the potential for a positive return to be less than you may
require to meet your investment objectives.
What are some different ways of thinking
about risk?
Many people define risk as the volatility of the markets,
especially in the short run. That’s why, over the long run,
your timeframe is perhaps the most critical component
in planning your investments.
A more complete measure of risk might be the risk that
you do not save enough and invest appropriately during
your working life to achieve the level of retirement income
that you aspire to.
One big risk most investors face is that their purchasing power
will be eroded by rising prices due to inflation. “Playing it safe”
and accepting lower market volatility also generally means
accepting the potential for lower returns — a risky strategy if
you are trying to keep up with or beat inflation.
Good advice from an experienced, well informed
financial adviser can help you better understand the
risks and potential losses associated with your chosen
investment option.
Risk and your investment time horizon
Your investment horizon, or the period of time that you
intend to keep your investment, can affect the way you
think about investment risk. If you are investing for a
retirement that is 25 or 30 years away, you typically have
more time to ride out the ups and downs of the market.
Diversifying across a range of asset sectors, industries
and securities can reduce your risk and improve your
investment outcomes.
What if your timeframe is shorter? If you’re close to
retirement, you may not have the time to ride out a
downturn. Your tolerance for volatile returns may be lower
and you may want to consider investments that historically
produce smoother returns from year to year. However, even
after you retire, you may still want to keep some of your
assets in growth-oriented investments — after all, you may
be retired for 10, 20 years or more.
Managing risk with diversification
Diversification, or spreading your money across a number of investments, can mean that you don’t have to rely on the
performance of any one investment, so if one falls in value, another may perform well to make up for the loss.
There are many ways to diversify your investments through REST
Type of diversification
Example
Accessed in the REST range through
Across asset classes
A mix of asset classes, such as shares
and bonds
Core Strategy, Structured options
Within asset classes
For shares, a mix of companies in
different industries
All REST investment options
Across different countries
A mix of countries and geographical
regions with various economic conditions
Core Strategy, Structured options,
Overseas Shares option, Shares option,
Bonds option, Australian Shares option
Across investment managers
A mix of investment managers, each one
having a different approach to investing
and outlook on future market movements
All REST investment options except
Basic Cash
How we invest your money
We invest your money across different investment markets
using a range of asset classes and investment strategies to
meet the investment objectives of your investment option.
Investing in different investment markets, asset classes and
strategies require different expertise.
Therefore, we appoint professional investment managers
who specialise in the relevant areas. Most of these
managers are set a performance objective or an asset class
benchmark to meet or exceed whilst working within the
risk guidelines we set. We regularly monitor and review the
performance of each investment manager, and we may add
or remove managers as appropriate.
Within each asset class, REST, or the appointed investment
managers, may implement particular investment strategies
to enhance returns or reduce risk relative to the multitude
of potential investments, as defined by the benchmark
of that asset class. For example, within the overseas
shares asset class, we may invest in small capitalisation
or emerging market shares that are not included in the
benchmark for that asset class – the MSCI All Country
World ex-Australia Index.
Similarly, we may seek to reduce market risk within a
particular asset class, for example, by excluding certain
types of investments from our investment portfolio, by
purchasing options or using other derivative instruments.
Understanding asset classes
Most assets fall into two broad groups – defensive assets
and growth assets – so called because of their different risk
and return characteristics.
The descriptions of the asset classes below may not cover
all the types of investments which are included in REST’s
asset classes.
Defensive assets
Defensive assets aim to protect your investment’s value.
They are lower risk investments, which means the chances
of a negative return are lower than other asset types. They
usually provide lower returns that may not outpace inflation
in the long-term. REST’s defensive assets include Cash,
Bonds and Defensive Alternatives.
Cash
A portfolio of securities with a low level of interest rate
risk. Includes securities which either have, on average,
a short-term to maturity (12 months or less), for example,
bank deposits, bank bills and commercial paper; or
securities which have a floating interest rate that resets
over short-term periods (12 months or less), for example,
residential mortgage backed securities.
Bonds
A mixture of Australian and overseas debt securities
issued by governments, semi-government authorities and
companies. Bonds typically have a fixed coupon paid on
a regular basis and are exposed to both interest rate risk
(the impact that changing interest rates have on bond
values) and default risk.
Defensive Alternatives
Consist of alternative assets with defensive characteristics
which include absolute return investments. They may
comprise a broad mix of strategies across global financial
markets which offer diversification characteristics.
Growth assets
Growth assets aim to increase your investment returns.
They have historically produced higher returns over the
long-term. However, higher returns come with an increased
risk that your investments could provide a negative return
over a shorter timeframe. REST’s growth assets include
Australian Shares, Overseas Shares, Property, Infrastructure
and Growth Alternatives.
Investment Guide | 5
How we invest your money (continued)
Property
Includes retail (shops and shopping centres), industrial
(factories and warehouses), commercial (office buildings),
retirement villages and student accommodation. Property
investments provide rental income and can rise and fall in
value over time.
in equity-based investments, including unlisted private
equity investments and long/short strategies. Growth
opportunities invest in a range of investments potentially
spanning all investment markets and employing a broad
mix of investment strategies. Agricultural investments
invest in agricultural holdings such as farms.
Shares
Represent part-ownership in a company. Shares generally
provide returns in the form of dividends and, in the longer
term, in the form of capital gains, but capital losses
(negative returns) are also possible. Different categories of
shares include:
How the asset classes perform
$140,000
Each asset class has its own level of risk and return. Typically,
the greater an investment’s risk, the greater its potential
return over the long-term and vice versa – the lower the risk,
the lower the potential return over the long-term.
$120,000
Growth Alternatives
Consists of alternative assets with growth characteristics
which include equity strategies, growth opportunities
and agricultural investments. Equity strategies invest
6
• negative returns are possible over any given period
• returns shown are based on market indices
• returns quoted are before tax and fees
(unless otherwise specified).
$100,000
The index returns in the graph are derived from the
following indices:
$80,000
$60,000
Australian shares – S&P/ASX 300 Accumulation Index
$40,000
Overseas shares – MSCI Daily Total Return Net World Index
ex Australia in A$
$20,000
$-
Year
Australian shares Direct property Overseas shares Cash 2016
2011
2006
Property – Mercer Unlisted Property Index
2001
The graph on the next page shows that shares have ups and
downs from year to year, indicating they are more volatile
and carry a higher level of risk. However, over the long-term,
these asset classes have also produced higher returns than
bonds and cash. Alternatively, leaving your super invested
in less volatile assets that carry a lower level of risk, such as
cash and bonds, may be the safest option in the short-term,
but over the long-term they may not provide a sufficient
investment return for you to meet your retirement
income goal.
$160,000
1996
Infrastructure
Mainly involves holdings (directly or through other funds)
in transport and utility assets, including airports, toll
roads, shipping ports, electricity and gas generation and
distribution assets.
• returns are not guaranteed and are current to
30 June 2016
• past performance is not an indication of future
performance
1991
• Overseas shares – investments in companies operating
overseas listed on foreign exchanges.
Risk, or volatility, is the likelihood of variations in the level
of returns over a given period, including the likelihood
of negative returns. When you take on a higher risk, there
is a greater chance that the value of your investments will
fluctuate more over the short-term.
Regarding this graph, please note that:
$180,000
1986
• Australian shares – investments in companies listed on
the Australian Securities Exchange.
Asset class performance since 1986
How $10,000 invested in each asset class from
1 July 1986 would have grown over 30 years.
Bonds – Bloomberg AusBond Composite 0+ Yr Index
(all maturities) and Citigroup World Government Bond
Index (hedged)
Cash – Bloomberg AusBond Bank Bill Index
Bonds
Investment Guide | 7
Making your investment choice
Finding the right balance through asset
allocation
Your investment choices
Growth
Overseas
Shares
Australian
Shares
Shares
Diversified
The weightings you choose depend on the outcome you
want to achieve. For example, if your goal is to maximise
your investment returns over the long-term, you could
consider investing the majority of your money in growth
assets and the rest of your money in defensive assets.
High
Growth
Core
Strategy
Asset Type
Balanced
Capital
Stable
You can decide how involved you want to be with your
asset allocation. You can either choose a pre-mixed asset
allocation, or actively manage your own asset allocation.
Property
Bond
Choosing a pre-mixed asset allocation
Cash Plus
Cash
Basic Cash
Defensive
1
Lower risk
2
3
4
Risk band and level
Your investment choices
You may invest in a single option, or in a mix of the Core
Strategy, Structured and Member-tailored options. You can
also choose to invest your current savings one way and any
future contributions and rollovers a different way.
Take the investor profile quiz online at rest.com.au or see
a licensed financial adviser for a full assessment of your
financial situation. Certain life events such as marriage,
the birth of a child, receiving an inheritance or receiving
a redundancy may be appropriate times to review your
investments and possibly make a switch.
Core Strategy
The objective of the Core Strategy is to achieve a
balance of risk and return by investing in both growth
and defensive assets. Further details regarding the Core
Strategy can be found on page 10.
REST’s Core Strategy is reviewed by the Trustee regularly
and the asset allocation is actively managed to take account
of current and expected market conditions. This means that
we invest your money in various asset classes, such as cash,
bonds, property, infrastructure, alternative investments and
shares, and adjust the investment mix around the benchmark
weighting within the ranges nominated.
We also actively monitor the overall exposure to foreign
currencies and may change the level of exposure as a result
of changes in foreign currency markets.
Structured options
REST’s Structured options are diversified across asset
classes to match different member needs. We determine
an appropriate asset allocation to enable each option to
achieve its investment objective.
5
6
7
Higher risk
Members may choose either one or a mix of the five
structured options listed in the table on pages 10 and 11.
These options are not actively managed – that is, we will
not normally change the asset allocation of the options
in response to changing market circumstances. However,
we may vary the asset allocation in any of these options
from time to time.
Member-tailored options
REST’s Member-tailored options invest in single asset
classes for those who want to build their own customised
portfolio. You can choose from one or more of the seven
asset classes listed on pages 12 to 13.
As you select the asset allocation, we do not undertake any
active management of asset allocation for your super account.
In order to create asset class diversity you would need to
select a combination of multiple investment options. It is
possible for a portfolio created in this way to have a very
high degree of risk (ie high variability of returns) if, for
example, you choose Shares alone.
Features of REST’s investment options
Asset allocation
pre-mixed
across asset
classes
Asset allocation
actively
managed
Core Strategy
Yes
Yes
Structured options
Yes
No†
Member-tailored
options
No*
No
†The Trustee sets and reviews asset weightings from time to time to take into account changing market conditions, but does not do this on
an active basis.
*Except the Shares option, which is pre-mixed across Australian and overseas shares.
8
Asset allocation is the process of deciding how much
money you want to invest in each asset class, commonly
represented as a percentage (or weighting) of your total
investment portfolio.
REST offers a number of pre-mixed investment options
which have an allocation to a range of asset classes
with various weightings which will be dependent upon the
investment return objective and the time horizon for the
investment option.
REST’s Core Strategy is reviewed by the Trustee regularly
and the asset allocation is actively managed to take
account of current market conditions.
REST also has a number of pre-mixed Structured options
for which the Trustee has determined the asset allocation
and reviews the mix on at least an annual basis. The Trustee
does not actively manage the asset allocation of these
options in the same way it does for the Core Strategy.
Creating your own portfolio
You can create your own portfolio by choosing the
percentages of one or more investment options. Your
selected percentages must total 100%. Your money will stay
in your selected investment option(s) until you switch it to
another option(s).
If you have elected to build your own portfolio, you may
also need to consistently review and occasionally rebalance
your investments to ensure they continue to reflect your
preferred asset allocation.
You can change your choice at any time
REST realises your investment needs may change over
time, so you have the option to change your investment
choice at any time (switching).
When making a switch you need to decide if you want
to switch:
• your current account balance only
• the way future contributions and rollovers are applied, or
• both.
Your switch will become effective in accordance with the
terms on ‘How to switch an investment option’ on
rest.com.au/investments Your switch will be confirmed
in writing once processed. If you switch online, you will
receive a printable confirmation. There is a separate buy and
sell unit price for each option. When money is invested in
an option it will generally use the buy price. When money is
withdrawn from an option it will generally use the sell price.
You can login to MemberAccess at rest.com.au to switch
your investment options online. You will need your REST
member number and password to login. If you don’t have a
password, you can register for one online. Alternatively, you
can use the ‘Application to make an investment choice’
form accompanying this guide.
Keep up to date with your super and build your
knowledge by signing up for eNewsletters in
MemberAccess at rest.com.au
Investment options
The following pages outline REST’s investment
options in detail. This information will help you
compare the different investment options so you
can make an informed investment choice that’s
right for you.
Before you begin, it’s important to read the following
information. The returns on the following pages are quoted at
30 June each year after fees and taxes (not directly charged
to your account) have been deducted, unless otherwise
specified. The returns are current as at 30 June 2016.
REST reserves the right to vary the asset allocations
(including the benchmark and ranges) of all or any of
these options, introduce new options and close existing
options, without prior notice. The asset allocations for each
investment option are available at rest.com.au/investments
Your investment in REST is not guaranteed. The value of
your investment can rise or fall. The returns indicated for
each investment option are based on the past performance
of investment markets that may not be repeated in the
future and are quoted to indicate the expected relative
performances of the investment options over the
long-term. Past performance is not an indication of future
performance. You should consider obtaining financial
advice before making an investment decision.
Take our Investor Profile Quiz online at
rest.com.au to find out what type of investor
you are. Then, compare the different investment
options and make a choice that is right for you.
The investment return objectives quoted on pages 10 to 13
of this document are not guaranteed.
Investment Guide | 9
Core Strategy
Structured options
Cash Plus
Capital Stable
Balanced
Diversified
High Growth
A stable pattern of returns that
at the same time maintains a low
probability of a negative return in
any 1 year.
A good balance of risk and return
by investing in approximately equal
proportions of growth assets and
defensive assets.
Strong returns over the longer term by
investing in a diversified mix of assets
weighted towards shares and other
growth assets.
Maximise returns over the long-term
by investing predominantly in
growth assets.
CPI + 2% pa over the medium-term
(rolling 6 year periods).
CPI + 3% pa over the long-term
(rolling 10 year periods).
CPI + 4% pa over the very long-term
(rolling 12 year periods).
43% defensive, 57% growth
22% defensive, 78% growth
7% defensive, 93% growth
A mix of shares and bonds (both
Australian and overseas), property,
infrastructure, alternative assets
and cash.
Australian and overseas shares,
property, infrastructure, alternative
assets plus lesser amounts of bonds
(both Australian and overseas)
and cash.
Australian and overseas shares,
property, infrastructure and
alternative assets.
Aim­1
To achieve a balance of risk and
return by investing in both growth
assets and defensive assets.
Maintain the purchasing power
of the funds invested by earning
a slightly higher return on cash,
while minimising the risk of any
capital loss.
Investment
return
objective2
CPI + 3% pa over the long-term
(rolling 10 year periods).
Outperform the Bloomberg
CPI + 1% pa over the medium-term
AusBond Bank Bill Index over the
(rolling 4 year periods).
short-term (rolling 2 year periods).
Asset
allocation3
22% defensive, 78% growth,
100% defensive
A mix of shares and bonds
(both Australian and overseas),
property, infrastructure,
alternative assets and cash.
Cash plus a small allocation to
Defensive Alternatives. Cash
consists of a portfolio of securities
with a low level of interest rate risk
(12 months or less), including bank
deposits, bank bills, commercial
paper and floating rate notes, for
example, residential mortgage
backed securities.
6%
29%
6%
10%
62% defensive, 38% growth
Mainly bonds (both Australian
and overseas) and cash, with
smaller proportions of shares
(both Australian and overseas),
property, infrastructure and
alternative assets.
4%
6%
9%
10%
14%
7%
14%
6% (0-25%)
6% (5-75%)
10% (0-25%)
13% (0-25%)
38%
Cash securities
Defensive
alternatives
7%
Cash securities
Bonds
Defensive
alternatives
Growth alternatives
Infrastructure
Property
Australian shares
Overseas shares
90%
6% (0-15%)
11% (0-25%)
19% (15-45%)
29% (5-35%)
16%
90%
10%
32%
16%
13%
21%
5% 10%
Cash securities
Bonds
Defensive
alternatives
Growth alternatives
Infrastructure
Property
Australian shares
Overseas shares
14%
9%
4%
5%
8%
12%
12%
11%
9%
10%
Minimum
suggested
timeframe
7%
30%
5%
11%
Cash securities
Bonds
Defensive
alternatives
Growth
alternatives
Infrastructure
Property
Australian shares
Overseas shares
20%
21%
32%
8%
13%
19%
6%
12%
9%
10%
Cash securities
6%
Bonds
7%
Defensive
alternatives
9%
Growth alternatives 11%
Infrastructure
7%
Property
9%
Australian shares
21%
Overseas shares
30%
20%
10%
13%
10%
5%
7%
14%
21%
7%
7%
26%
Defensive
alternatives
Growth alternatives
Infrastructure
Property
Australian shares
Overseas shares
7%
12%
7%
10%
26%
38%
10+ years
2+ years
4+ years
6+ years
10+ years
12+ years
Standard risk
measure4
Estimated number of negative
annual returns over any 20 year
period, 3 to less than 4
Estimated number of negative
annual returns over any 20 year
period, less than 0.5 of a year
Estimated number of negative
annual returns over any 20 year
period, 1 to less than 2
Estimated number of negative annual
returns over any 20 year period, 2 to
less than 3
Estimated number of negative annual
returns over any 20 year period, 3 to
less than 4
Estimated number of negative annual
returns over any 20 year period, 4 to
less than 6
Risk band
and level5
Risk band 5, Medium to High
Risk band 1, Very Low
Risk band 3, Low to Medium
Risk band 4, Medium
Risk band 5, Medium to High
Risk Band 6, High
What this
option has
returned6
Yearly return+
Yearly return
Yearly return
Yearly return
Yearly return
Yearly return
2012
0.85%
2012
3.99%
2012
4.26%
2012
2.77%
2012
0.84%
2012
-0.52%
2013
(Past
performance is
not an indication 2014
of future
2015
performance)
18.42%
2013
3.70%
2013
10.48%
2013
14.07%
2013
18.73%
2013
21.65%
13.29%
2014
2.96%
2014
7.58%
2014
10.01%
2014
13.08%
2014
15.17%
9.47%
2015
2.72%
2015
7.17%
2015
8.99%
2015
11.26%
2015
12.80%
1.82%
2016
1.78%
2016
1.81%
2016
1.87%
2016
2.01%
2016
1.81%
2016
Annualised return
Five year8.56% pa
Ten year 6.54% pa
Annualised return
Five year3.03% pa
Ten year3.63% pa
Annualised return
Five year6.22% pa
Ten year5.45% pa
Each of our investment options is designed for members with the investment objectives, risk tolerance and investment time horizon that is set out
in the table above for that investment option.
Investment options with an exposure to the Australian shares asset class may include companies listed in Australia whose legal domicile is
overseas. In addition, up to 10% of this asset class may be invested in stocks listed on the New Zealand Stock Exchange.
† The Core Strategy’s returns are based on unit pricing from 1 January 2013 onwards. Prior to that a crediting rate was used.
1. Aim – This is the goal or objective of the investment option.
2. Investment return objective – This is what the Trustee uses to determine asset allocation. It is also used to measure if the investment objective
is met. It is not a guaranteed rate of return. REST does not use the Return Target (shown in the Product Dashboard available at rest.com.au/
dashboard) to set the investment return objective.
3.Asset allocation – For the Core Strategy option, the asset allocation will vary year to year within the ranges shown in brackets.
This also means the allocation to defensive assets and growth assets will vary from time to time.
10
Annualised return
Five year7.44% pa
Ten year5.82% pa
Annualised return
Five year8.97% pa
Ten year6.31% pa
For all options other than the Core Strategy:
• The allocation to an individual asset class may vary by +/- 5%
from the benchmark allocation shown, but not below 0% or
more than 100% for an individual asset class;
• Where an option does not currently have a benchmark
allocation to Cash, an allocation of up to 5% may be
introduced; and
• The overall allocation to growth assets and defensive assets
may vary by +/- 10% from the allocation shown.
The Trustee may vary the asset allocations, including the benchmarks
and ranges, of all or any of the investment options, introduce new
options, or close or terminate existing options.
Annualised return
Five year9.86% pa
Ten year6.52% pa
4.Standard Risk Measure – This is a guide as to the likely number
of negative annual returns expected over any 20 year period.
See ‘What is the Standard Risk Measure?’ on page 4.
5. T
he risk band and risk level is based on the Standard Risk
Measure. The Standard Risk Measure includes seven risk bands,
from one (very low risk) to seven (very high risk).
6. W
hat this option has returned – Returns are net of investment
fees and taxes as at 30 June. The returns are based on the
valuation of the underlying assets as at 30 June.
Investment Guide | 11
Member-tailored options
Aim1
Investment
return
objective2
Asset
allocation3
Basic Cash
Cash
Bond
Provide you with the opportunity to construct portfolios that are appropriate to your own particular
circumstances. Your portfolio may be constructed from one or more of the Basic Cash, Cash, Bond,
Property, Shares, Australian Shares and Overseas Shares options, as well as from the Structured options
and the Core Strategy. This permits the construction of portfolios with an extremely wide range of
risk/return objectives.
Match the return of the Reserve Perform in line with the
Outperform the benchmark
Bank cash rate target before
Bloomberg AusBond Bank Bill
return (before tax and after
tax and before fees over rolling
Index (before tax and after fees) fees) over rolling 2 year
1 year periods.
over rolling 1 year periods.
periods. The benchmark is
calculated using the Bloomberg
AusBond Composite 0+ Yr
Index, Bloomberg AusBond
Inflation 0+ Yr Index Citigroup
World Government Bond Index
(hedged) and Barclays Global
Inflation linked Index (hedged).
100% defensive
The portfolio will invest in
deposits with, or short-term
discount securities (bank bills
and negotiable certificates of
deposit) issued by, banks rated at
least AA- at the time of purchase.
It may also invest in short-dated
debt issued and guaranteed by
the Australian Commonwealth or
State Governments. All securities
will have a maximum term to
maturity of three months.
100% defensive
A portfolio of securities with
a low level of interest rate risk
(12 months or less), including
bank deposits, bank bills,
commercial paper and floating
rate notes, for example,
residential mortgage backed
securities.
100%
100% defensive
A mixture of Australian and
overseas debt securities
issued by Governments, semigovernment authorities and
companies.
Property
Shares
Australian Shares
Overseas Shares
Provide you with the opportunity to construct portfolios that are appropriate to your own particular circumstances.
A portfolio may be constructed from one or more of the Basic Cash, Cash, Bond, Property, Shares, Australian Shares and
Overseas Shares options, as well as from the Structured options and the Core Strategy. This permits the construction of
portfolios with an extremely wide range of risk/return objectives.
Outperform both the
Mercer Unlisted Property
Index (before tax and
after fees) over rolling 3
year periods and the 10
year bond rate plus 3% pa
over rolling 5 year periods.
Outperform the benchmark
return (before tax and
after fees) over rolling 3 year
periods. The benchmark is
calculated using the S&P/
ASX 300 Accumulation
Index and the MSCI All
Country World ex-Australia
Index in $AUD.
Outperform the S&P/ASX
300 Accumulation Index
(before tax and after fees)
over rolling 3 year periods.
Outperform the MSCI All
Country World ex-Australia
Index in $AUD (before tax
and after fees) over rolling
3 year periods.
100% growth
(for further information,
please see page 15)
100% growth
A mixture of Australian and
overseas shares.
100% growth
100% growth
100%
100%
100%
100%
60%
Cash securities
100%
Cash securities
100%
Bonds
100%
Property
100%
100%
40%
Australian shares 40%
Overseas shares 60%
Australian shares 100%
Overseas shares 100%
Suggested
minimum
timeframe
3 months or less
1 to 2 years
4+ years
10+ years
12+ years
12+ years
12+ years
Standard risk
measure4
Estimated number of negative
annual returns over any 20 year
period, less than 0.5 of a year
Estimated number of negative
annual returns over any 20 year
period, less than 0.5 of a year
Estimated number of negative
annual returns over any 20 year
period, 3 to less than 4
Estimated number of
negative annual returns
over any 20 year period,
3 to less than 4
Estimated number of
negative annual returns
over any 20 year period,
4 to less than 6
Estimated number of
negative annual returns
over any 20 year period,
6 years or greater
Estimated number of
negative annual returns
over any 20 year period,
4 to less than 6
Risk band 1, Very Low
Risk band 1, Very Low
Risk band 5, Medium to High
Risk band 5, Medium to High
Risk band 6, High
Risk band 7, Very High
Risk band 6, High
Introduced on 1 July 2009
Yearly return
2012
3.76%
2013
2.69%
2014
2.24%
2015
2.04%
2016
1.81%
Annualised return
Five year
2.51% pa
Ten year n/a
2012
2013
2014
2015
2016
Risk band
and level5
What this
option has
returned6
(Past
performance
is not an
indication
of future
performance).
Yearly return
3.87%
3.15%
2.62%
2.36%
2.04%
Annualised return
Five year2.81% pa
Ten year3.60% pa
Yearly return
9.11%
7.38%
4.89%
5.80%
1.62%
Annualised return
Five year5.73% pa
Ten year6.02% pa
2012
2013
2014
2015
2016
Each of our investment options is designed for members with the investment objectives, risk tolerance and investment time horizon that is set out
in the table above for that investment option.
Investment options with an exposure to the Australian shares asset class may include companies listed in Australia whose legal domicile is
overseas. In addition, up to 10% of this asset class may be invested in stocks listed on the New Zealand Stock Exchange.
1. Aim – This is the goal or objective of the investment option.
2. Investment return objective – This is what the Trustee uses to determine asset allocation. It is also used to measure if the investment objective
is met. It is not a guaranteed rate of return. REST does not use the Return Target (shown in the Product Dashboard available at rest.com.au/
dashboard) to set the investment return objective.
3.Asset allocation – For the Core Strategy option, the asset allocation will vary year to year within the ranges shown in brackets.
This also means the allocation to defensive assets and growth assets will vary from time to time.
12
Yearly return
5.21%
6.85%
7.74%
6.01%
12.99%
Annualised return
Five year7.73% pa
Ten year6.42% pa
2012
2013
2014
2015
2016
Yearly return
-3.83%
27.79%
19.24%
15.41%
-0.57%
Annualised return
Five year10.95% pa
Ten year6.04% pa
2012
2013
2014
2015
2016
For all options other than the Core Strategy:
• The allocation to an individual asset class may vary by +/- 5%
from the benchmark allocation shown, but not below 0% or
more than 100% for an individual asset class;
• Where an option does not currently have a benchmark
allocation to Cash, an allocation of up to 5% may be
introduced; and
• The overall allocation to growth assets and defensive assets
may vary by +/- 10% from the allocation shown.
The Trustee may vary the asset allocations, including the benchmarks
and ranges, of all or any of the investment options, introduce new
options, or close or terminate existing options.
Yearly return
-4.96%
22.75%
18.39%
7.49%
3.32%
Annualised return
Five year8.93% pa
Ten year6.92% pa
2012
2013
2014
2015
2016
Yearly return
2012
2013
2014
2015
2016
-2.92%
30.77%
19.61%
20.46%
-3.69%
Annualised return
Five year11.99% pa
Ten year4.42% pa
4.Standard Risk Measure – This is a guide as to the likely number
of negative annual returns expected over any 20 year period.
See ‘What is the Standard Risk Measure?’ on page 4.
5. T
he risk band and risk level is based on the Standard Risk
Measure. The Standard Risk Measure includes seven risk bands,
from one (very low risk) to seven (very high risk).
6. W
hat this option has returned – Returns are net of investment
fees and taxes as at 30 June. The returns are based on the
valuation of the underlying assets as at 30 June.
Investment Guide | 13
Investment fees and other costs
What you need to know about REST Investments
These fees apply together with the fees and costs in the PDS.
Unit prices and determining the value of
your account
Investment fee
The investment fees are fees related to the management of each investment option. They include fees that have been paid and/
or accrued such as investment management fees (including performance fees), custody fees, investment adviser fees and other
investment related costs. These fees are accrued and reflected in an option’s unit price. They are not deducted directly from
your account. The investment fee is expressed as an annual percentage of the value of each investment option.
The Investment Fees are our estimate of likely future investment fees only, based on the final year ended 30 June 2016.
Actual fees applied in the future may differ from the estimated fees. Actual fees applied in the future may differ (ie higher
or lower) from the estimated fees and may change without prior notice. Your annual statement will disclose the actual
investment fees (including performance fees). For the latest investment fees please refer to rest.com.au
Investment option
Estimated
performance fee
(pa)
Total estimated
investment fee (pa)
(including
performance fee)
Buy Spread
Range
Sell Spread*
0.06%
0.60%
0.02 - 0.18%
0.00%
Core Strategy
Cash Plus
0.00%
0.13%
0.01 - 0.03%
0.00%
Capital Stable
0.02%
0.44%
0.03 - 0.10%
0.00%
Balanced
0.04%
0.53%
0.04 - 0.12%
0.00%
Diversified
0.06%
0.63%
0.06 - 0.13%
0.00%
High Growth
0.08%
0.69%
0.07 - 0.16%
0.00%
Basic Cash
0.00%
0.05%
0.01 - 0.03%
0.00%
Cash
0.00%
0.05%
0.01 - 0.03%
0.00%
Bonds
0.00%
0.21%
0.02 - 0.05%
0.00%
Shares
0.12%
0.62%
0.05 - 0.10%
0.00%
Property
0.00%
0.53%
0.31 - 0.47%
0.00%
Australian shares
0.24%
0.71%
0.05 - 0.10%
0.00%
Overseas shares
0.04%
0.55%
0.05 - 0.10%
0.00%
* As the sell spread is 0% there is no sell spread range.
Performance fees
Performance fees are included in, and increase, investment fees but don’t affect administration fees. They are not an
additional fee. Performance fees change each year and vary for each investment option. REST pays performance fees to
investment managers that outperform a defined target return. Performance fees can affect any REST investment option,
except Basic Cash. The percentage fee investment managers receive and the target returns vary.
Buy/sell spreads
Members’ transactions may result in underlying assets being purchased or sold. These underlying asset transactions generally
incur a transaction cost. Buy/sell spreads represent the estimated transaction costs, including brokerage fees and stamp duty,
incurred when buying or selling underlying assets in relation to each investment option.
There will be a separate buy and sell unit price for each investment option, the difference between the prices representing
the total buy/sell spread. When money is invested in an option we will generally use the buy price. When money is withdrawn
from an option we will generally use the sell price.
Buy/sell spreads are not a fee paid to REST or investment managers but are used to meet underlying transaction costs when
incurred. The spread charged will be an additional cost to you when you contribute to or withdraw from your account, if you
switch between investment options or any other transaction is processed in your account balance (for example deduction of
fees or insurance costs).
If you transfer your account balance from one REST product to another, a buy/sell spread will only apply if you also change
the underlying investment options. If this occurs, your new investment will be processed after the transfer is finalised. For
more information on ‘How to switch an investment option’, please visit rest.com.au/investments
The buy/sell spreads are set by the Trustee and may change within the range without prior notice. The spreads will
be reviewed on a regular basis and available online at rest.com.au. You should consider these costs when making any
investment decision.
14
When you invest with REST, your account balance is made
up of contributions, rollovers and transfers into the Fund,
plus or minus investment returns, less any fees, charges,
taxes, insurance costs that apply and any benefits you claim.
The value of your account is expressed in numbers of units
and the unit value for each investment option your account
balance is invested in.
Each investment option has its own unit price, which is
the monetary value of one unit. Unit prices are normally
calculated by dividing the value of the assets held in the
investment option after allowing for certain fees and
expenses such as management fees and expenses, and
taxes by the total number of units on issue for that
investment option.
Unit prices include an allowance for costs that would be
incurred if the underlying assets were purchased or sold on
the day the unit prices are calculated. Income entitlements
are included in asset values to calculate the unit price.
Each time we receive a contribution or rollover for you, we
will use it to purchase a number of units in the investment
option(s) of your choice. The number of units purchased
depends on the value of the units (called the unit price)
at the date of purchase. Units are purchased at the buy
price. Details of the unit prices for each investment option
are available on our website at rest.com.au and click on
‘Investments’.
The value of your account balance will fluctuate depending
on variations to the unit price of your investment option(s)
and the amount of any taxes, fees, charges and insurance
costs applied to your account. Your member statement
will show your account balance’s dollar value and the
number of units you hold.
Before you make an investment choice or leave
the Fund
The benefit payable to you on withdrawal from the Fund is
determined by multiplying the number of units you hold by
the applicable unit price at the date of withdrawal, less any
taxes, fees, charges and insurance costs that may apply to
your account. The unit price reflects the value of each unit
in an investment option.
When you switch out of an investment option or leave
the Fund, the sell unit price used is at the time that your
transaction is processed.
Unit prices can vary. You should check the latest prices
before making a decision.
Valuation Policy
REST values its investments regularly so that it can process
transactions at values that are fair and reasonable which
will usually be market value. Listed assets are valued by
REST’s Custodian with security prices being obtained from
publicly quoted and independent security pricing services.
Directly held property and unlisted assets are valued
on a regular basis according to an approved valuation
methodology.
Once the revaluation of an investment is received it
will be fully reflected in unit prices at the next available
opportunity. Unit prices are generally declared on a daily
basis. For more information on unit pricing, please visit
rest.com.au/investments
REST can delay or suspend release of unit prices, or apply
a special price due to volatile market conditions and
other circumstances as the Trustee determines is fair and
reasonable. REST has unit pricing and market disruption
policies, which when triggered, will apply instead of
normal practices.
Valuation considerations for REST’s
Property option
REST’s Property option has a benchmark allocation of
100% to direct property and unlisted property trusts. These
investments are not listed and are not traded frequently in
the marketplace, such as the share market.
They are effectively ‘illiquid’ assets, which means that
they cannot be bought and sold quickly and valuations
are updated less frequently than is the case for listed
investments. The unit price for the Property option is
based on the combined valuations of the underlying direct
properties and unlisted property trusts. The valuations
are undertaken regularly and by independent valuers, but
are less frequent than for assets such as shares which are
traded daily in the public markets and therefore subject to
influences such as market sentiment.
This means that changes in the unit price of the Property
option may differ significantly from changes in the value of
listed property assets. REST’s directly held properties are
re-valued quarterly by qualified external property valuers
and the valuations for the unlisted unit trusts are undertaken
in accordance with each manager’s valuation policies and
the frequency of valuation updates ranges from monthly up
to a maximum of one year. Despite the illiquid nature of the
assets for the Property option, REST members are generally
able to buy or sell Property option units within the standard
timeframes used for all other options.
REST aims to hold a diversified range of investments and this
approach is applied to the Property asset class. However,
due to the high value nature of some of the properties held,
some assets may constitute a relatively large percentage
of the asset class. For example, currently the two largest
directly held commercial office buildings located in the
Sydney and Melbourne CBD constitute more than 20% of the
Property asset class.
Property option terms and conditions
Members choosing to invest in the Property option must
agree to terms and conditions which will allow the Trustee,
without prior notice, to place a freeze on transactions in the
Property option for a period of up to two years.
Investment Guide | 15
What you need to know about REST Investments (continued)
Members (including pension members) who select the
Property option as part of their investment choice, must
agree to the following terms and conditions:
(a)the Property option is an illiquid investment because
either or both of the following apply to the underlying
investments:
(i)the underlying investment (being either direct
property or units in an unlisted property trust) cannot
be converted to cash within 30 days to meet a
member’s or pension member’s withdrawal, rollover,
transfer or switch request (‘Transaction Request’)
out of the Property option;
(ii)converting the underlying investment of the Property
option into cash within 30 days would be likely to
have a significant adverse impact on the realisable
value of the investment;
(b)the Trustee is not required to process Transaction
Requests within 30 days;
(c)the Trustee will process Transaction Requests within 30
days, unless the Trustee has frozen Transaction Requests
out of the Property option;
(d)the Trustee may, without prior notice, freeze Transaction
Requests out of the Property option for up to two years
and the member (including a pension member, to the
extent applicable – see below) waives their right to
require the Trustee to process any Transaction Request
they make until the freeze is over due to the illiquid
nature of the underlying investments; and
(e)the Trustee may at any time close the Property option
to new contributions. In the case of pension members
qualifications to the freeze terms apply – see below.
Should the Property option be frozen at any point in time,
the Trustee will communicate this to members invested in
the Property option. The Trustee will also communicate
to members invested in the Property option whether
contributions will be accepted into the Property option
during the freeze or not.
Qualifications to the Property option freeze
terms and conditions apply to pension members
Qualifications to the Property option freeze terms and
conditions apply to pension members. Relevantly:
(a)Pension members may only elect to have a maximum
of 80% of their entire initial balance invested in the
Property option.
(b)If the Trustee determines to freeze Transaction Requests
out of the Property option and a pension member
has less than (or equal to) 80% of their entire balance
invested in the Property option on a pension payment
date during the freeze, then that pension member will
still receive his or her nominated pension payment due
on that pension payment date (paid firstly from and
in proportion to their non-Property balance(s) on that
pension payment date).
16
(c)If the Trustee determines to freeze Transaction Requests
out of the Property option and a pension member has
more than 80% of their entire balance invested in the
Property option on a pension payment date during the
freeze, then that pension member will receive his or her
minimum legislated pension payment amount (but no
more) on that pension payment date (paid firstly from
and in proportion to their non-Property balance(s) on
that pension payment date).
Derivatives
Derivatives can refer to a wide range of financial
instruments, the most common of which are futures and
options. They are called derivatives because they usually
‘derive’ their price from the value of an underlying security.
The attraction of derivatives is that they can give investors
the same degree of market exposure as the underlying
assets, but with much lower transaction costs.
The value of derivatives will rise and fall, just as the value
will rise and fall for the underlying securities. Investors
might have a number of reasons for preferring derivatives
in specific situations. REST, for example, allows its
investment managers to use derivatives to:
• protect the portfolio’s value (portfolio insurance)
• change the interest rate sensitivity within cash and fixed
interest portfolios
• change market exposure rapidly
• modify exposure to foreign currency.
Superannuation law and the Australian Prudential
Regulation Authority (APRA) has imposed strict conditions
on the use of derivatives by super funds. REST monitors its
investment managers’ compliance with those conditions. In
the long-term, the use of derivatives is expected to enhance
REST’s investment returns and provide an effective way to
manage risk.
Asset description and reporting
REST’s description and reporting of asset classes, asset
allocations, investment options and returns include the use
of derivatives.
Within asset classes such as shares there can be, from time
to time, a holding of cash securities depending on how
investment managers are structuring their portfolios.
Trustee investment strategy
We may change the underlying investment managers of
the investment options at any time, and we may close
investment options and introduce new investment options.
Within each asset class, the Trustee may implement
particular investment strategies to enhance returns or
reduce risk. This may be achieved by making or excluding
particular investments and by using derivative instruments.
Reserves
context of the Trustee’s overall investment objectives.
REST currently maintains a number of reserves, including
an operational risk financial requirement reserve, capital
reserve, group life insurance reserve and administration
reserve. These reserves are maintained and used in
accordance with REST’s reserving strategy and policy, such
as to meet any losses from operational risk and provide
for capital requirements, or insurance and administration
payments. REST currently has adequate provisions in its
reserves. REST may from time to time need to top up its
reserves and may apply funds from the investment options to
do so. This would impact the respective unit prices.
Unless specified otherwise in the Trustee’s mandate with
an investment manager, the Trustee does not prescribe
a specific methodology in relation to the extent to which
sustainability matters should be taken into account by
an investment manager. However, investment managers
are expected to consider a range of factors relevant to
the selection of underlying investments comprising their
portfolios. This may include ‘sustainability matters’ such as
valuation, risks to revenues, gearing levels, financial stability,
policy risk, governance, labour standards, environmental,
social or ethical considerations, and any other factor the
investment manager considers relevant to the investment
of the investment manager’s underlying investments.
Our approach to sustainable investing
The Trustee is required by law to act in the best interests
of REST members when exercising its duties and powers.
More specifically, the Trustee has a responsibility to act in
members’ best interests as a whole, and must not favour
the interest of one group of members over another. In
addition, the Trustee has a duty to promote the financial
interests of REST members who are MySuper members
(these are members invested wholly in the Core Strategy).
Given the diverse membership of REST and the Trustee’s
duty to act impartially between different groups of
members, the Trustee believes that its duty requires it to
focus on growing the retirement savings of its members.
Sustainable investing considers factors which have the
potential to impact the long-term financial performance
of an investment. These factors include but are not limited
to environmental, social and governance factors (ESG),
exogenous factors (such as technological advances or
legislative changes) and other factors which are intrinsic to
the financial structure of an investment (such as leverage
and refinancing risk).
The Trustee primarily invests through investment managers
(via mandates or pooled funds) rather than directly. The
Trustee retains an investment adviser who provides advice
to the Trustee in relation to the selection and monitoring
of investment managers. The selection and monitoring
process for investment managers includes an assessment
by the investment adviser and the Trustee of a range
of factors (eg investment philosophy, investment style,
business structure and risk management, etc), the most
important of which is the confidence by the Trustee in an
investment manager’s ability to deliver risk adjusted returns
consistent with the intended purpose of the mandate in the
When an investment manager is initially considered, the
Trustee undertakes an extensive due diligence program
in conjunction with its investment adviser in regard to
understanding how sustainability measures are embedded
within the investment process. The Trustee recognises that
sustainability issues and risks may have a material influence
on the investment returns over the long term. As a result,
the Trustee adopts strategies and appoints investment
managers that are considered to be consistent with the
Trustee’s objectives as a long-term investor on behalf of
its members. REST has policies in place to ensure that
sustainability issues are considered when exercising voting
rights and corporate actions in context on its impact on
the long term investment performance. Furthermore, the
Trustee continuously engages its incumbent investment
managers, its investment adviser, other super funds
and industry bodies to ensure sustainability matters are
adequately catered for within REST’s investment strategy.
Fundamentally, sustainable investing is a strategic risk
management issue. In this sense, investment managers that
successfully identify sustainability factors and understand
how such factors impact their investments over the long
term are best placed to contribute to the attainment of the
Fund’s stated investment objectives, therefore enabling
REST to meet its fiduciary duties to members.
You can check your account balance and make
an investment choice online in MemberAccess at
rest.com.au
Investment Guide | 17
Terms explained
Below is an explanation of some of the terms you will find within this booklet.
Aim
The goal for the investment option, to be assessed against
the investment return objective.
Asset allocation
The assets of the Fund were invested with the following investment managers as at 30 June 2016.
Australian Shares
• Allan Gray Australia Pty Ltd
• Balanced Equity Management
Pty Ltd
• Cooper Investors Pty Ltd
• Greencape Capital Pty Ltd
• Paradice Investment Management
Pty Ltd
• Renaissance Smaller Companies
Pty Ltd
• Super Investment Management
Pty Ltd*
• Ubique Asset Management Pty Ltd
Overseas Shares
• Colonial First State Asset
Management (Australia) Ltd
• Cooper Investors Pty Ltd
• GAM International Management Ltd
• Global Thematic Partners
• Holowesko Partners Ltd
• Hosking Partners LLP
• Longview Partners LLP
• MFS International (UK) Ltd
• Northcape Capital Pty Ltd
• Paradice Investment Management
Pty Ltd
• Wellington Management Australia
Pty Ltd
Defensive Alternatives
•B
NP Paribas Investment Partners
(Australia) Ltd
• EnTrustPermal Ltd
• GMO Partners Ltd
•G
AM International Management Ltd
Growth Alternatives (Equity Strategies)
• Holowesko Global Fund Ltd
Growth Alternatives (Growth
Opportunity)
• Apollo ST Fund Management LLC
• Babson Capital Management LLC
• Bentham Asset Management Pty Ltd
• Hayfin Capital Management LLP
• Super Investment Management Pty
Ltd
Growth Alternatives (Agriculture)
• Warakirri Asset Management Pty Ltd
How an investment is spread across the different
asset classes.
Inflation
The rise in the prices of goods and services, often
measured by the Consumer Price Index.
Asset class
A category of investment, such as shares, fixed interest
or property.
Interest
The amount paid in a certain period on money borrowed
or invested. It is usually expressed as a percentage.
Benchmark
a.The asset allocation expected to apply to an investment
option most (but not all) of the time, as it is the
allocation most likely to achieve an investment’s
long-term objectives.
Investment manager
A person or organisation contracted to manage
investments on behalf of the Trustee.
b.An index against which an investment managers
performance is measured, eg an Australian share
manager’s performance may be measured against the
S&P/ASX 300 Accumulation Index which measures the
performance of the top 300 publicly listed companies
in Australia.
Investment managers
Infrastructure
• AMP Capital Investors Ltd
• Super Investment Management*
Pty Ltd
Property
• Charter Hall Funds Management Ltd
• GPT Funds Management Ltd
• Super Investment Management*
Pty Ltd
Bonds
• Brandywine Global Investment
Management Ltd
• Franklin Templeton Investment
Australia Limited
• Super Investment Management
Pty Ltd*
• UBS Global Asset Management
(Australia) Ltd
Cash
• Colonial First State Asset
Management (Australia) Ltd
• Super Investment Management
Pty Ltd*
Growth assets
Assets that are more risky but generally produce higher
returns over the long-term such as shares and property.
Buy/sell spread
Represents the estimated transaction costs,
including brokerage fees and stamp duty, incurred
when buying or selling underlying assets in relation
to our investment options.
Consumer price index (CPI)
A measure of inflation that compares the cost of living
(ie goods and services) over time. CPI is calculated and
reported by the Australian Bureau of Statistics.
Defensive assets
Assets that are less risky but generally produce lower
returns over the long-term such as cash and bonds.
Diversification
Spreading your money across different assets, investment
options, investment managers or localities to help
reduce risk. In other words: not putting all your eggs
in the one basket.
Future transactions
Includes all contributions, rollovers or transfers in, as well
as transfers out, benefit claims, fees, charges, taxes,
insurance cost and other deductions that apply to your
account after the effective date of the nomination.
Investment return objective
The return that the Trustee is aiming to achieve. This is not
a guaranteed rate of return.
Return
The amount that an investment has changed over
time (positive or negative), usually expressed as an
annual percentage.
Risk
The possibility that an investment will have an undesirable
outcome. Generally, the higher the potential return of an
investment, the higher the risk.
Standard risk measure
A guide to the likely number of negative annual returns
expected over any 20 year period.
Switching
Moving some or all of your current balance from one
investment option to another.
Time horizon
The period of time that you intend to keep your investment.
Unit price
The monetary value of one unit in an investment option.
Volatility
The extent to which the price of an investment moves up
and down.
Basic Cash
• Super Investment Management
Pty Ltd*
* Super Investment Management Pty Limited (ABN 86 079 706 657, AFSL 240004) is a wholly-owned company of the Trustee, held for the
benefit of the Fund. Super Investment Management Pty Limited, like other investment managers of REST, receives a fee for its investment
management services. REST deals with Super Investment Management Pty Limited on an arms-length basis.
18
Investment Guide | 19
Application
Application
toto
make
make
anan
investment
investment
choice
choice
Office
Office
Use Use
YouYou
cancan
complete
complete
an online
an online
version
version
of this
of this
form
form
quickly
quickly
andand
easily
easily
in MemberAccess
in MemberAccess
at rest.com.au.
at rest.com.au.
Or, you
Or, you
cancan
complete
complete
thisthis
form
form
andand
mailmail
it to:it REST
to: REST
Industry
Industry
Super,
Super,
PO PO
BoxBox
350,350,
Parramatta
Parramatta
NSW
NSW
2124.
2124.
UseUse
thisthis
form
form
to select
to select
an investment
an investment
option,
option,
or to
orchange
to change
youryour
investment
investment
option.
option.
Please
Please
write
write
in BLOCK
in BLOCK
LETTERS
LETTERS
andand
use use
a BLACK
a BLACK
or or
BLUE
BLUE
pen.pen.
ThisThis
form
form
will will
be invalid
be invalid
if unsigned
if unsigned
andand
undated.
undated.
Investment
Investment
options
options
other
other
thanthan
Core
Core
Strategy
Strategy
are are
not not
classified
classified
as MySuper
as MySuper
products.
products.
Fields
Fields
marked
marked
* are* are
mandatory.
mandatory.
If you
If you
do not
do not
complete
complete
all mandatory
all mandatory
fields,
fields,
there
there
maymay
be abe
delay
a delay
in processing
in processing
youryour
request.
request.
Section
Section
1: Personal
1: Personal
details
details
(fields
(fields
withwith
* are* required)
are required)
Member
Member
number*
number*
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Mr/Mrs/Ms/Miss/Dr
Mr/Mrs/Ms/Miss/Dr
Surname*
Surname*
Given
Given
name(s)*
name(s)*
UnitUnit
number*
number*
Date
Date
of birth
of birth
(dd/mm/yyyy)*
(dd/mm/yyyy)*
Street
Street
number*
number*
Street
Street
name*
name*
Suburb/Town*
Suburb/Town*
State*
State*
Telephone
Telephone
(business
(business
hours)
hours)
Postcode*
Postcode*
Mobile
Mobile
Email
Email
address
address
This page has been intentionally left blank
Section
Section
2: Investment
2: Investment
choice
choice
Select
Select
either
either
Option
Option
1 or1Option
or Option
2 2
Option
Option
1 1
Option
Option
2 2
If you
If you
would
would
like like
youryour
entire
entire
current
current
balance
balance
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in the
in the
same
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way,way,
complete
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column
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onlyonly
If you
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complete
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columns
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balance
balance
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balance
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below:
Investment
Investment
code
code
Future
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transactions
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must
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eveneven
if if
there
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A3 A3
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A4 A4
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CoreCore
Strategy
Strategy
Structured
Structured
options
options
Member-tailored
Member-tailored
options
options
Basic
Basic
CashCash
C7 C7
CashCash
C1 C1
Bond
Bond
C2 C2
Shares
Shares
C3 C3
Australian
Australian
Shares
Shares
C4 C4
Overseas
Overseas
Shares
Shares
C5 C5
Property*
Property*
C6 C6
TotalTotal
*Conditions
*Conditions
apply.
apply.
SeeSee
‘Declaration’.
‘Declaration’.
MustMust
totaltotal
100%
100%
MustMust
totaltotal
100%
100%
MustMust
totaltotal
100%
100%
The Trustee
The Trustee
company
company
of Retail
of Retail
Employees
Employees
Superannuation
Superannuation
TrustTrust
ABNABN
62 653
62 671
653394
671 394
is Retail
is Retail
Employees
Employees
Superannuation
Superannuation
Pty Limited
Pty Limited
ABNABN
39 001
39 987
001 739,
987 739,
AFSL
AFSL
240003.
240003.
Registered
Registered
Office:
Office:
LevelLevel
7, 507,Carrington
50 Carrington
Street,
Street,
Sydney
Sydney
NSWNSW
2000.
2000.
Issue
Issue
date:
date:
1 October
1 October
2015
2015
Page
Page
1 of 12of 2
Section 3: Declaration
Please direct my current balance and all future transactions made by me and/or on my behalf to the investment option(s) that
Office Use
I have nominated on this form.
Application to make an investment choice
I declare that:
• I have read, understood and agree to all information in the relevant PDS and Investment Guide
You•can
complete an
online
version of
this form
in MemberAccess
atarest.com.au.
I understand
that
the material
contained
inquickly
the PDSand
andeasily
Investment
Guide is only
general outline of the issues covered
Or, you
can
complete
this
form
and
mail
it
to:
REST
Industry
Super,
PO
Box
350,
Parramatta
NSW
2124. my own circumstances, or
• I understand that if I have selected investment option(s) without any professional advice
regarding
I
have
chosen
not
to
provide
all
the
information
required
by
my
adviser,
or
I
have
chosen
to
take
an option(s)
thata differs
Use this form to select an investment option, or to change your investment option. Please write in BLOCKup
LETTERS
and use
BLACKfrom
or
my adviser’s
I may be
making
investment
decisions
a financial
commitment
in respect
of my as
super
based
BLUE pen.
This formrecommendations,
will be invalid if unsigned
and
undated.
Investment
optionsorother
than Core
Strategy are
not classified
MySuper
on my
own
views *and
may notIfsuit
products.
Fields
marked
arethat
mandatory.
youmy
do needs
not complete all mandatory fields, there may be a delay in processing your request.
• I understand that ‘current balance’ includes any transfers and contributions received prior to the date the switch becomes effective
Section
1: Personal
details
(fields with * are
required)
and that
any transfers
and contributions
received
after that date will be considered a ‘future transaction’
• I understand that once my request to switch has been accepted, it cannot be reversed. A further switch can be lodged which will
Member number*
then take effect on the relevant date for that particular switch
■■■■■■■■■
■■■■
■■■■■■■■■■■■■■■■■■■■■■
■■■■■■■■■■■■■■■■■■■ ■■ ■■ ■■■■
■■■■ ■■■■■■■ ■■■■■■■■■■■■■■■■
■■■■■■■■■■■■■■■■■■■■ ■■■ ■■■■
■■ ■■■■ ■■■■ ■■■■ ■■■ ■■■
■■■■■■■■■■■■■■■■■■■■■■■■■■■■■
• I understand that my switch will become effective in accordance with the terms on “How to switch an investment option”
Mr/Mrs/Ms/Miss/Dr
Surname*
on rest.com.au/investments
• I consent to the use and disclosure of information provided in this form in accordance with information on privacy in the PDS and
REST’s Privacy Policy
Given name(s)*
Date of birth (dd/mm/yyyy)*
• I accept responsibility for any choice of investment option and acknowledge REST shall not be liable for any loss due to a choice
made by myself
Unit• number*
Streettransactions
number* by me or on my behalf
Street
Please direct all future
toname*
the investment option(s) that I have nominated in this form
• I understand if I have not made an investment choice or that if my choice does not total 100% that this form will be invalid
Suburb/Town*
State*
Postcode*
• REST can contact me by email if I have provided my email address
• I understand and agree to the following terms and conditions that apply to the Property option, to the extent that I have selected
the Property
Telephone
(businessoption:
hours)
Mobile
(a) the Property option is an illiquid investment option as it invests mainly in property which cannot be sold quickly without a
significant loss in value;
Email address
(b) I agree to waive my right to require the Trustee to process any withdrawal, rollover, transfer or switch request (‘Transaction
Request’) I make within 30 days, due to the illiquid nature of the underlying investments;
(c) the Trustee will process Transaction Requests within 30 days, unless the Trustee has frozen Transaction Requests out of the
SectionProperty
2: Investment
choice
option; and
(d) the Trustee may, without prior notice, freeze Transaction Requests out of the Property option for up to two years.
Select either Option 1 or Option 2
Option 1
Option 2
These terms and conditions have been introduced for the purpose of complying with
the
illiquid
investment
rules
in Regulation
6.34A
If you would like your current
balance
and
If you would like
of the Superannuation Industry (Supervision) Regulations
1994.current
any future transactions allocated in a different
your entire
balance and any
future transactions
allocated in the same
way, complete this
column only
Signature of applicant
➲
Office use only
■■■■
way, complete both of these columns
Current balance
Either
Date (dd/mm/yyyy)
Tick this box:
Do not switch my
■■
■■ ■■■■
■
current balance
Or
Choose how you would
like to switch your current
balance below:
Investment code
Future transactions
You must complete
this column even if
there is no change
in the way you would
like your future
transactions allocated.
B1
■■■.■■%
■■■.■■%
■■■.■■%
Cash Plus
A1
Capital Stable
A2
■■■.■■%
■■■.■■%
■■■.■■%
■■■.■■%
■■■.■■%
■■■.■■%
■■■.■■%
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■■■.■■%
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0 0 %
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1 0 0 .■■
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■■■
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■■■.■■%
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■■■.■■%Office Use
1 0 0 .■■
0 0 %
■■■
Core Strategy
Structured options
Balanced
A3
Diversified
A4
High Growth
A5
Member-tailored options
Basic Cash
C7
Cash
C1
Bond
C2
Shares
C3
Australian Shares
C4
Overseas Shares
C5
Property*
C6
Total
*Conditions apply. See ‘Declaration’.
Must total 100%
Must total 100%
Must total 100%
The Trustee company of Retail Employees Superannuation Trust ABN 62 653 671 394 is Retail Employees Superannuation Pty Limited ABN 39 001 987 739, AFSL
240003. Registered Office: Level 7, 50 Carrington Street, Sydney NSW 2000.
Page
2 of
2
Issue
date:
1 October
2015
947.3
Page10/15
1 of 2ISS4
This page has been intentionally left blank
Issued by Retail Employees Superannuation Pty Limited (Trustee)
ABN 39 001 987 739 AFSL 240003
Retail Employees Superannuation Trust ABN 62 653 671 394
35.3 12/16 ISS 19