Schroder Wholesale Real Return Investments Personal super Pension FirstChoice Wholesale Option Profile & Commentary - December 2014 3 month (%) 6 month (%) 1 year (%) pa - - - Investments Distribution Return Growth Return Personal super Pension Benchmark^ 3 years (%) pa ------- 5 years (%) pa 10 years (%) pa Since inception Inception date Fund size Management costs* - - - May 2014 $3.81m 1.22% May 2014 May 2014 $3.39m $7.84m 1.25% 1.25% ^Estimated 'CPI - Australia (Trim) Past performance is not an indicator of future performance for this option or any other option available from Colonial First State. For options less than 12 months old, meaningful performance figures are not yet available. All returns are calculated on an annualised basis using exit price to exit price with distributions reinvested, net of management costs, transaction costs and for FirstChoice Personal Super and FirstChoice Employer Super net of tax payable by the trustee. All return calculations exclude contribution surcharge, excess contribution tax or individual taxes payable by the investor and all other fees and rebates disclosed in the relevant product disclosure statements available on our website or by calling us. For FirstChoice Investments, the ‘distribution’ component is the amount paid by the way of distribution, which may include net realised capital gains. * Management costs include management fees, estimated performance fees (if applicable), investment expenses and custody fees but do not include contribution fees, transaction costs or adviser or plan service fees which may also apply. Please refer to the PDS for full details of the applicable fees and costs. Investment objective To deliver an investment return of 5% pa before fees and taxes above inflation over rolling three-year periods. Inflation is defined as the Reserve Bank of Australia’s Trimmed Mean, as published by the Australian Bureau of Statistics. Investment strategy Schroder’s approach to inflation plus (real return) investing is to choose the portfolio that has the highest probability of achieving the required return objective over the investment horizon, and the least expected variability around this objective. The fund employs an objective based asset allocation framework in which asset market risk premia, and consequently, the fund’s asset allocation are constantly reviewed so that they are most closely aligned with meeting the objective. The fund may hedge currency risk up to 100% of the fund’s value. Investment category Investment ranges Growth Range Benchmark Cash and cash equivalents, investment grade securities 0 - 100% n/a Australian and global high yield, emerging market 0 debt - 75%and Asian bonds n/a Australian and global shares and property securities 0 - 75% n/a Cash 0 - 10% 0% Minimum suggested timeframe At least 5 years Income distribution Cents per unit Franking level Realised capital 2.03 7% 23% Total 13/14 fin yr Performance chart ($100,000 invested since inception) $110,000 $105,000 $100,000 $95,000 Dec 14 Nov 14 Oct 14 Sep 14 Aug 14 Jul 14 Jun 14 May 14 $90,000 Schroder Wholesale Real Return returns are calculated using exit price to exit price with distributions reinvested, net of management and transaction costs. Asset allocation 60% 50% 40% 30% 20% 10% Other Cash Fixed Interest Property Infrastructure Global Shares Aust Shares 0% Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of interests in FirstChoice Personal Super, FirstChoice Wholesale Personal Super, FirstChoice Pension, FirstChoice Wholesale Pension and FirstChoice Employer Super from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. The investment information in this option profile is historical, produced as at the date specified above. The information below (except performance and key data information) relates to the FirstChoice Wholesale Investments option only. Information for other options in the FirstChoice product range will be different and is available at colonialfirststate.com.au or by calling us on 13 13 36. We may change asset allocation and securities within the option at any time. Past performance is not an indicator of future performance for this option or any other option available from Colonial First State. FS5788 Fund Profile Investments PersonalSuper Pension Schroder Wholesale Real Return – 31 December 2014 Please note this is the view of the fund manager who manages this option. Market review Central banks continue to flood the world with liquidity, and while the US Federal Reserve is taking its foot off the accelerator, it is very much managing its messaging so as not to spook investors. Global economic growth has remained in a low gear and many markets have been taken to a point where valuations no longer look attractive. The recent acceleration in US economic growth may be an indicator of a change in the economic environment. Nevertheless, while economists understood this empirical fact, there was little understanding of the drivers of this process, making it problematic to forecast when these headwinds would dissipate. The Manager has seen the unemployment rate steadily fall over the last five years. While there is debate about how tight the labour market really is given it was largely driven by a fall in the participation rate, a key event was the peak in profit margins during late 2013. Labour’s share of the economic pie has stopped falling and stabilised, which is usually an important marker for the business cycle. If the labour market remains robust and therefore continues to tighten, wages share should start to rise and profit share fall. This occurs in the later stages of the business cycle and indicates recession risks are rising. Historically this labour market indicator has been associated with rising caution, reflected in an increase in volatility, both implied and actual. Economic fundamentals therefore suggest that the lows for volatility were put in place in 2014. However, during the last business cycle, this relationship did not hold, as the US Federal Reserve managed to suppress volatility for a time, due to their transparent, slow and modest tightening cycle (0.25% per meeting every six weeks). This suppression of volatility contributed to excessive risk taking, ultimately contributing to the GFC – where fear and volatility surged to record levels. With the quarter seeing strong performances across most financial assets, most positions provided a positive contribution. The largest contribution came from the Portfolio’s equities holdings, followed by the holdings of investment grade bonds. Despite the pick-up in overall market volatility in 2014, volatility in the Fund remained low. Consistent with this, the Fund posted only one modest negative monthly return in March, compared to sharp declines in local equities in January, June, September and December. Outlook and strategy So the question for the Manager in 2015: does volatility increase in line with fundamentals or do central banks manage to suppress it? In the near term, the Manager thinks that fundamentals will be the driver. Given that markets are pricing in much less monetary policy tightening in the US than the Fed itself expects, the risk to markets is for a surprise. Given the expensiveness of traditional diversifiers (bonds) the Manager holds assets that are cheap and generally work in times of risk off. Cash holdings remain elevated, which will give the Fund the flexibility to respond to opportunities provided by an increase in volatility. While the Manager did not anticipate the collapse in oil prices and the subsequent rise in market concern about deflation, the Manager has for some time highlighted the need to maintain a level of absolute duration in the Fund to protect against this risk. Ultimately the Manager sees the decline in oil prices as being positive for consumers and growth in key markets more broadly. In the near term, it also alleviates some pressure on the Fed to raise rates due to stronger activity and declining unemployment. Fund performance and activity This document provides general advice only and is not personal advice. It does not take into account your individual objectives, financial situation or needs. Product Disclosure Statements (PDSs) for all Colonial First State products are available at colonialfirststate.com.au or by contacting Investor Services on 13 13 36 or from your financial adviser. You should read the relevant PDS and assess whether the information in it is appropriate for you, and consider talking to a financial adviser before making an investment decision. Commonwealth Bank of Australia and its subsidiaries do not guarantee the performance of Colonial First State’s products or the repayment of capital by the products. Investments in these products are not deposits or other liabilities of the Commonwealth Bank of Australia or its subsidiaries and investment type products are subject to investment risk including loss of income and capital invested. Information used in this publication, which is taken from sources other than Colonial First State is believed to be accurate. Information provided by the Investment Manager are views of the Investment Manager only and can be subject to change. Subject to any contrary provision in any applicable law, neither Colonial First State nor any of its related parties, their employees or directors, provides any warranty of accuracy or reliability in relation to such information or accept any liability to any person who relies on it.
© Copyright 2024 ExpyDoc
