Capabilities
Funds SA offers a range of investment options, from cash to growth-oriented strategies and tailored strategies, to specifically meet our client’s investment objectives.
Our investment and operational approach enables us to cater for different tax environments, with investment options available for tax-exempt investors, tax-paying investors, and those investors who are able to take advantage of franking credit refunds.
There are currently 17 investment options, including tailored options for specific clients, distinguished by differing risk profiles, return targets, investment time horizons, and tax status.
These investment options invest into common asset class pools according to the determined strategic asset allocation for each option.
Funds SA investment option objectives
Funds SA investment option | Investment horizon | Target return | Risk of a negative return | Growth Asset Ranges* |
Cash | 0+ years | RBA Cash Rate | Less than 0.5 years in 20 | 0% |
Capital Defensive | 2+ years | CPI + 0.5% | Between 2 and 3 years in 20 | 10% - 40% |
Conservative | 4+ years | CPI + 1.5% | Between 2 and 3 years in 20 | 25% - 55% |
Moderate | 6+ years | CPI + 2.5% | Between 3 and 4 years in 20 | 40% - 70% |
Socially Responsible | 10+ years | CPI + 3.0% | Between 4 and 6 years in 20 | 55% - 85% |
Balanced | 10+ years | CPI + 3.5% | Between 4 and 6 years in 20 | 60% - 90% |
High Growth | 10+ years | CPI + 4.5% | Between 4 and 6 years in 20 | 70% - 100% |
Defined Benefit | 10+ years | CPI + 4.5% | Between 4 and 6 years in 20 | 70% - 100% |
* ‘Growth’ assets include equities, certain types of property and growth alternatives. The remainder of the funds are invested in ‘Defensive’ assets, including fixed income, inflation linked bonds and cash.
Please note: The investment objectives state the aims of each investment option and are designed to help investors with their investment decisions. The objectives have been developed having regard for the long-term performance and characteristics of financial markets. There is a reasonable probability that the target returns for each investment option will be achieved over its stated time horizon based on the investment strategies employed. However, there is no guarantee the target returns will be met because financial markets are volatile and past performance is not a reliable indicator of future performance. Indeed, for investment options with exposure to growth assets, there is a material likelihood that returns may be negative in any particular year.
Our asset classes are the building blocks for any investment option or strategy we create.
Asset class | Investments |
Australian Equities | Equity exposure to companies listed or about to be listed on the Australian Securities Exchange. Active and passive asset classes are used. |
International Equities | Equity exposure to companies listed on international stock exchanges. Includes exposure to emerging markets and small companies. Active and passive asset classes are used. |
Private Markets | Investment opportunities with expected returns in excess of long-term expectation for listed equities, not classifiable within the other asset classes. |
Property | Exposure to Australian listed and unlisted property across the office, retail and industrial sectors. Includes a range of assets from the premium end of the property market providing long-term cashflows from quality tenants and which are held for the long term and through investment cycles. May also include an exposure to some sectors with a higher risk and return expectation such as development and refurbishment opportunities with a shorter investment horizon. |
Infrastructure | Investment opportunities in assets or companies which display one or more of the following characteristics: provide an essential service that is important to the functioning of society at large or a specific community; have stable or predictable cash flow generation; have a long useful economic life or operate under long-term concessions; display monopoly-like characteristics or have high barriers to entry into their market; and provide an element of inflation protection. |
Alternatives | Growth Alternatives
Absolute return strategies being liquid alternative investments that can take both long and short positions across a wide range of financial market instruments to generate alpha. The strategy is designed as a liquid alternative to growth assets such as equities. Defensive Alternatives
Absolute return strategies being liquid alternative investments that can take both long and short positions across a wide range of financial market instruments to generate alpha. The strategy is designed as a liquid alternative to defensive assets such as fixed interest. |
Credit | Sub-Investment Grade Credit
Investments in debt securities that are issued by companies, asset backed and mortgage-backed structures, and entities other than developed market governments. These instruments are primarily subject to movement in credit spreads, which may result in both positive and negative valuation changes. |
Fixed Interest | Exposure to debt instruments providing principal repayment at maturity, and coupon payments at regular intervals until maturity. These instruments are subject to movement in bond yields, which may result in both positive and negative valuation changes. Includes investments in:
Investment Grade Credit
Investments in publicly traded debt securities issued by predominately global high quality non-government borrowers.
Inflation-linked Securities
Exposure to debt securities providing a fixed rate of return in excess of an index related to the general level of prices in the economy, such as the Consumer Price Index or Average Weekly Earnings. These instruments are subject to movement in real yields, which may result in both positive and negative valuation changes.
Long-Term Fixed Interest
Investments in domestic and global government issued debt securities of a long maturity.
Short-Term Fixed Interest
Investments include short maturity debt securities issued predominantly by Australian high quality corporate and financial entities. |
Cash | Exposure to Australian short-term interest rate sensitive debt instruments, such as bank bills, that provide a high level of liquidity with minimal risk of capital loss. |
Foreign currency | Exposure to foreign currency is a component of owning international assets. The amount of foreign currency in the investment option is managed to a foreign currency target. |
