CARE Super Pty Ltd (Trustee) ABN 91 006 670 060 AFSL 235226 RSE L0000956 CARE Super (Fund) ABN 98 172 275 725
Disclaimer: This Annual Report is issued by the Trustee of CARE Super, CARE Super Pty Ltd ABN 91 006 670 060, the holder of Australian Financial Services Licence 235226.
The information contained in this Annual Report is about CARE Super and is not intended as financial advice. It does not take into account specific needs, so members should look at their own personal position, objectives and requirements before taking any action. Past performance is not a reliable indicator of future performance and you should consider other factors before choosing a fund or changing your investments. The Trust Deed is the legal document governing your superannuation benefit. Other information about CARE Super: a copy of the Trust Deed, Investment Policy Statement, the Fund’s audited accounts are available upon request. You should also obtain and read the Product Disclosure Statement before making any investment decision. If you would like to see these documents, please go to caresuper.com.au or call the CareSuperLine on 1300 360 149.
How we manage 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 Fund or to cause the overall exposure to any asset class or combination of classes to breach the long-term strategic ranges.
Voting
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 2017 the following investment managers held more than 5% of the Fund’s assets.
IFM Investors | 9.48% |
IFM Enhanced Index Equity Fund | 5.66% |
IFM Australian Infrastructure Fund | 1.86% |
IFM Specialised Credit Fund | 1.05% |
IFM Infrastructure Debt | 0.48% |
IFM International Private Equity III | 0.33% |
IFM International Private Equity II | 0.04% |
IFM Australian Private Equity IV | 0.04% |
IFM Australian Private Equity III | 0.01% |
IFM International Private Equity I | 0.01% |
Schroder Investment Management Australia | 8.24% |
Schroder Australian Equities | 4.67% |
Schroder Global Dynamic Blend | 3.57% |
Colonial First State | 7.63% |
MFS Investment Management | 7.05% |
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.
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 Fund maintains a General Reserve that 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 is maintained to provide for the risks of operating a superannuation fund. The level of Operational Risk Reserve maintained is reflective of the size, complexity and business of the Fund (0.30% of net assets as at 30 June 2017). Reserves are formally reviewed on a quarterly basis.
These reserves are invested in a strategy appropriate to their time frame and risk profile which are reviewed annually by the Board. The General Reserve is invested as a combination of asset class exposures in line with the superannuation Balanced Option as well as interest bearing cash balances to maintain liquidity. The Operational Risk Reserve is invested in an investment exposure consistent with the aggregate asset allocation of the Fund’s investments.
CareSuper's reserves over the last three years | % of fund net assets | |
2016/17 | $151,188,797 | 1.17% |
2015/16* | $122,262,815 | 1.10% |
2014/15 | $94,919,144 | 0.92% |
*The 2015/16 reserves balance has been re-stated as required to comply with the application of the new Accounting Standard AASB1056 from 1 July 2016. Further information is provided in the 30 June 2017 financial statements available on CareSuper’s website.