Funds SA has developed a series of investment portfolios to receive the funds of its investors.
There are currently 16 multi-sector funds distinguished by differing risk profiles, return targets, investment time horizons and tax status. Eight funds are structured for tax-exempt investors and eight are structured for tax-paying investors or those investors who are able to take advantage of franking credit refunds (referred to as 'taxable' funds).
These multi-sector funds invest into common asset class pools (referred to as 'single sectors') according to the determined strategic asset allocation for each. Further details on the sectors are included on the Single Sector Funds page.
Both the tax-exempt and taxed funds have common names and investment objectives.
Funds SA Multi-Sector Fund Objectives
|Funds SA multi-sector funds||Investment horizon||Return target||Risk of a negative return||Growth Asset Ranges*|
|Cash||0+ years||Maintain value of capital||Less than 0.5 years in 20||0%|
|Capital Defensive||2+ years||CPI + 1.5%||between 0.5 and 1 year in 20||15% - 35%|
|Conservative||4+ years||CPI + 2%||Between 1 and 2 years in 20||25% - 45%|
|Moderate||6+ years||CPI + 3%||Between 2 and 3 years in 20||40% - 60%|
|Balanced||7+ years||CPI + 3.5%||Between 3 and 4 years in 20||55% - 75%|
|Growth||8+ years||CPI + 4%||Between 3 and 4 years in 20||65% - 85%|
|High Growth||10+ years||CPI + 4.5%||Between 4 and 6 years in 20||75% - 100%|
|Socially Responsible||The Socially Responsible fund provides investors with risk and return characteristics likely to be similar to those of a growth fund and accordingly annual returns will be volatile. The risk of a negative return is between 4 and 6 years in 20.|
|Defined Benefit||10+ years||CPI + 4.5%||Between 4 and 6 years in 20||75 - 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 what each fund aims to achieve 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 no guarantee, however, that the objectives will be met. This is because financial markets are volatile and future returns may vary from returns earned in the past. Indeed, for funds with exposure to growth assets, there is a material likelihood that returns may be negative in any particular year.
Performance of the Funds SA multi-sector funds can be viewed here.
Funds SA Multi-sector asset allocations
The strategic asset allocations of Funds SA's multi-sector funds are shown in the tables below.
Funds SA Multi-Sector Strategic Asset Allocations - Tax exempt
|Short Term Fixed Interest||30||18||7||3||0||0||0|
|Long Term Fixed Interest||5||5||9||8||4||0||0|
|Inflation Linked Securities A||15||16||12||9||6||0||0|
|Diversified Strategies Income||17||18||17||16||16||12||14|
|Australian Equities A||5||10||13||17||19||24||20|
|International Equities A||7||14||19||25||29||36||30|
|Diversified Strategies Growth A||0||0||5||8||10||10||16|
Funds SA Multi-Sector Strategic Asset Allocations - Taxable
|Short Term Fixed Interest||30||18||7||3||0||0|
|Long Term Fixed Interest||5||5||9||8||4||0|
|Inflation Linked Securities B||15||16||12||9||6||0|
|Diversified Strategies Income||17||18||17||16||16||12|
|Australian Equities B||5||11||14||19||22||27|
|International Equities B||7||13||18||23||26||33|
|Diversified Strategies Growth B||0||0||5||8||10||10|
The asset allocations are managed within ranges of +/- 5% around the strategic positions shown above, with the exception of Cash which is managed within a range of 0 to +20%.
The strategic asset allocation for the Socially Responsible fund is determined by the product provider, AMP Capital. Both the tax-exempt and taxed Socially Responsible funds invest in the same underlying fund.
Funds SA operates on a cost-recovery basis and has competitive fee arrangements.
The total expenses incurred within each fund reflect the ratio of total costs expressed as a percentage of average funds managed, referred to as an 'Indirect Cost Ratio' or 'ICR'.
The actual ICRs for Funds SA’s multi-sector funds for the 2017-18 financial year are shown below.
Funds SA Multi-Sector Fund Fees 2017-18
|Investment Fund||Tax-exempt fund|
*Is it important to note that the ICRs quoted above cannot be compared to ICRs previously reported as since 1 July 2017 Funds SA's basis for calculating ICRs has changed in line with standard industry quidelines for calculating and disclosing investment management costs.