Each of our investment options are invested according to a strategic (medium to long-term) asset allocation.
Options that are invested across more than one asset class (the Capital Secure, Capital Stable, Balanced, Socially Conscious, Growth (MySuper), and Equity Growth investment options) also include asset allocation ranges which means we can increase or reduce the exposure to an asset class, depending on market conditions.
To help reduce the impact of large market fluctuations and corrections, our options are invested across a range of asset classes such as shares, cash and fixed income. These asset classes are the building blocks of your investment and the main driver of returns.
Each diversified option is assigned a medium to longer term asset allocation, known as the strategic asset allocation. We also establish asset allocation ranges which are the minimum and maximum amounts we can invest in each asset class. The actual asset allocation in place at a particular time may vary from the strategic asset allocation because we use an active asset allocation approach.
The active allocation approach allows us to take advantage of market conditions by temporarily increasing or decreasing our exposure to a particular asset class (or a specific sector or geography within an asset class, e.g. US equities). This can help shield members from the risks of being overexposed to expensive markets and add incremental returns by increasing exposures to asset classes when they are attractive.
These deviations from the strategic asset allocation are generally in place for a short to medium term period and must be consistent with the investment objective and strategy of the option. While generally the actual asset allocation will be within the strategic asset allocation ranges, during an episode of significant market stress the actual asset allocation may be moved outside the ranges shown in the product disclosure statement.
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