Managing investments

CareSuper's Investment Policy

It is the responsibility of the Board to develop the investment policy and ensure the Trustee adheres to its principles, philosophy and guidelines.

There are several sub-policies covering the investment governance framework, investment fees, currency, proxy voting and asset valuation. Each of these policies is reviewed on a regular basis.

CareSuper’s assets are managed according to the investment strategy for each investment option that has specified asset allocation benchmarks or, in the case of the Managed options, an asset allocation range. The Trustee has developed an investment strategy after taking into consideration the Fund’s overall circumstances, reviewing membership demographics, current market conditions and all applicable legislation.

The Trustee has given consideration to the following objectives in establishing an investment strategy:

  • Produce real capital growth and income over time
  • Manage investments with a defensive strategy
  • Produce less volatile returns relative to peers
  • Provide competitive returns
  • Provide commensurate return for risk
  • Manage liquidity
  • Responsible investing, including the consideration of environmental, social and corporate governance issues
  • Tax-effectiveness, and
  • Costs.

The Trustee’s philosophy is to actively manage investments for the long term, with the aim of producing competitive returns while reducing risk when markets are volatile.

The Trustee selects and appoints professional investment managers to invest members’ assets consistent with the investment options.

Within most asset classes, the Trustee has diversified the management of investments between several investment managers (and varying investment styles) with the aim of moderating the volatility in the overall return of the asset class. The Trustee does not manage any investments internally, with the exception of term deposits and the cash flow required for day-to-day operations. Licensed investment consultants advise and assist the Fund with all investment matters including the selection of investment managers whose investment objectives must be consistent with the requirements of the Fund. Constraints applied to the managers are consistent with the objectives and philosophy of the Trustee.

Investment risk

All investments have varying degrees of risk and can change in value. Risk can mean either a fall in the value of an investment, particularly over shorter periods, or an investment not meeting its investment objectives over the long term. When investing, some of the most significant risks are:

  • Inflation
  • Liquidity, and
  • Financial loss.

For more information please see the Investment Guide or the Pension Guide.

Use of derivatives

Investment managers may use futures, options and other derivative instruments to enhance returns or manage risk. However, these instruments may not be used to leverage the portfolio or to cause the overall exposure to any asset class or combination of classes to breach the long-term strategic ranges.

Each year the Trustee seeks a statement from each investment manager on the use of derivatives within its portfolio.


Voting is a tool that shareholders, as owners of a company, can use to exert influence or send a signal to the board of a company. CareSuper considers voting best practice and exercises its voting rights on behalf of members where possible across the Australian and Overseas shares portfolios. CareSuper’s voting history can be viewed here.

Investment exposures

At 30 June 2016 the following investment managers held more than 5% of the Fund’s assets.

Schroders Investment Management Australia 10.49%
Schroders Global Dynamic Blend 4.67%
Schroders Australian Equity 4.33%
Schroders Fixed Income 1.49%
IFM Investors 10.40%
IFM Enhanced Index Equity Fund 5.81%
IFM Australian Infrastructure 1.94%
IFM Specialised Credit Fund 1.20%
IFM Infrastructure Debt 0.89%
IFM International Private Equity III 0.40%
IFM Australian Private Equity IV 0.07%
IFM International Private Equity II 0.06%
IFM Australian Private Equity III 0.02%
IFM International Private Equity I 0.01%
MFS Investment Management 7.02%
Colonial First State 6.41%
DEXUS Wholesale Property Fund 5.24%

Unit pricing

CareSuper uses unit prices to calculate and report members’ superannuation balances and apply investment returns in relation to investments in a Managed or Asset Class option. Every CareSuper member’s account balance information includes the number of units they own, as well as the latest sell price. A buy price is usually the price applied when contributions are made into an investment option, at which time a member’s account will be allocated units at the buy price. A sell price is usually applied when money is withdrawn from an investment option, including withdrawals from accounts for investment switches and payments, insurance premiums and tax deducted directly from an account. The sell price is used to calculate account balances. To find out additional details about buy–sell spreads and how unit prices are calculated, please see the Member Guide PDS and Investment Guide, or read the Pension Guide.

Managing unit pricing errors

In the event of a unit pricing error deemed material in nature, CareSuper aims to correct the financial position of current and former members by an amount that would bring their account balance to a position as if no error had occurred. In determining an amount of compensation CareSuper will, where practical, use actual values. If these are not available estimates will be used.

Investment strategy – reserves

CareSuper maintains reserves designed to provide for known and potential commitments and contingencies. The Fund maintains two reserve accounts as follows:

  • General Reserve, and
  • Operational Risk Reserve.

Reserve management

The General Reserve is maintained as a percentage of net assets (currently 0.40% of net assets) and is reflective of the size of funds under management, the demographics of the member base and the perceived financial market conditions and liquidity risks. The Operational Risk Reserve (ORR) is maintained to provide for risks reflective of the size, complexity and business of the Fund (currently 0.30% of net assets). Reserves are formally reviewed on a quarterly basis.

The reserves are invested in a strategy (appropriate to the time frame and risk profile) which is reviewed annually by the Board. Each strategy is invested in existing asset classes held by the Fund and are maintained by the Fund’s custodian.

CareSuper's reserves over the last three years % of fund net assets
2015/16  $101,124,254 0.91%
2014/15  $94,919,144 0.92%
2013/14  $76,510,177 0.85%

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