Our investment philosophy
Our investment philosophy guides the way we invest our members’ money. It’s made up of five principles, which underpin our belief in long-term strategy, active management, diversification, downside protection and investing sustainably.
Learn more about our investment philosophy
Our investment strategies
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. We develop our investment strategies after considering CareSuper’s overall circumstances and membership demographics, current market conditions and all applicable legislation.
We also consider 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
We select and appoint professional investment managers to invest members’ assets in line with the strategies for our investment options.
Within most asset classes, we’ve diversified the management of investments across several investment managers (and varying investment styles) with the aim of moderating the volatility in the overall return of the asset class. We don’t manage any investments internally, except for term deposits and the cash flow required for day-to-day operations. Licensed investment consultants advise and assist us with all investment matters including the selection of investment managers whose investment objectives must be consistent with our requirements. Constraints applied to the managers are consistent with our objectives and philosophy.
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. Some of the most significant risks for investing are:
- Financial loss.
Read our Investment Guide or the Pension Guide for more information.
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 overall exposure to any asset class or combination of classes to breach the long-term strategic ranges.
Owning shares in many different companies gives us the right to have a say in how they are managed.
By exercising our voting rights on a range of different resolutions at companies’ annual general meetings, we aim to maximise value for CareSuper members by using our influence to support positive corporate behaviour and drive improved ESG practices.
When voting on Australian Shares, we generally follow the guidelines provided by the Australian Council of Superannuation Investors (ACSI) on all non-investment related resolutions for stocks within the S&P/ASX 200 Index. ACSI provides independent research and advice to super funds on the environmental, social and corporate governance risk of companies in which they invest. When voting on financial-related issues, we seek guidance from its investment managers. If an investment manager holds shares outside the S&P/ASX 200 Index, that manager is expected to vote on resolutions at its own discretion.
See how we’ve voted
At 30 June 2018 the following investment managers held more than 5% of CareSuper’s assets.
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| - IFM Enhanced Index Equities
| - IFM Australian Infrastructure Fund
| - IFM Specialised Credit Fund
| - IFM International Private Equity Fund III
| - IFM Infrastructure Debt
| - IFM Australian Private Equity Fund IV
| - IFM International Private Equity Fund II
| - IFM Australian Private Equity Fund III
| - IFM International Private Equity Fund I
|Schroders Investment Management Australia
| - Schroder Australian Equities
| - Schroder Global Dynamic Blend
|MFS Global Equity Trust
|Colonial First State Australian Cash
CareSuper uses unit prices to calculate and report members’ super balances and apply investment returns in relation to investments in a Managed or Asset Class option. Every 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 more about buy–sell spreads and how unit prices are calculated, read our Investment Guide, or Pension Guide.
CareSuper maintains reserves designed to provide for known and potential commitments and contingencies. We maintain two reserve accounts:
- General Reserve, and
- Operational Risk Reserve.
How we manage reserves
CareSuper maintains a General Reserve that reflects the size of funds under management, the demographics of our 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 (ORR) maintained reflects the size, complexity and business of CareSuper. Reserves are formally reviewed on a quarterly basis. During the year the CareSuper Board determined to reduce the ORR target from 0.30% to 0.25%, which is a more accurate quantification of the fund’s operational risks given its relatively stable risk profile. As a result, the excess reserves were distributed to members.
These reserves are invested in a strategy appropriate to their time frame and risk profile which the CareSuper Board reviews annually. 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 CareSuper’s investments.
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*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