Investments
CSS investment options give members real choice
Default Fund
Investment objectives
The Default Fund’s key investment objective is to maximise the long-term real return within certain risk constraints. While the future investment climate cannot be predicted, ARIA is constantly monitoring its asset allocation and the global economic environment in which your money is invested.
Currently, a little over half of the fund’s assets are invested in equities, the majority of which are traded on listed exchanges. The fund also has a substantial program of alternative investments, including private equity and market-neutral strategies. To a degree, these are expected to behave independently of listed equity and bond markets, reducing the overall risk of the fund through the benefits of diversification.
Other investments include a portfolio of direct and indirect property holdings, actively diversified funds, government and corporate bonds, Australian residential mortgage backed securities (RMBS) and cash.
| Asset allocation | At 30 June 2009 | At 30 June 2010 |
| Australian equity | 25.4% | 27.1% |
| International equity | 23.8% | 27.4% |
| Long/short equity funds | 3.4% | 2.3% |
| Real assets | 17.2% | 14.3% |
| Alternatives | 9.3% | 11.8% |
| Fixed income | 11.2% | 11.9% |
| Cash | 9.7% | 5.2% |
Default Fund
Funds under management
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Fund performance
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All performance information is after tax and fees.
ARIA determines an earning rate for the Default Fund every business day, and earnings are allocated to members’ accounts monthly. The daily rates are used to calculate entitlements for members exiting the CSS.
For more information about our investment performance, see the Investments section of our CSS website.
Default Fund earning rates
Over the five years ending 30 June 2010, the compound average rate of earnings (after tax and fees) for the Default Fund is 3.5% per annum.
| Year | Earning rate (after tax and fees) |
Inflation rate |
| 2005/06 | 13.1% | 4.0% |
| 2006/07 | 13.7% | 2.1% |
| 2007/08 | -1.6% | 4.5% |
| 2008/09 | -14.3% | 1.5% |
| 2009/10 | 9.3% | 3.1% |
Cash Investment Option
Investment objectives
The Cash Investment Option’s key investment objective is to preserve its capital and earn a return close to that of the UBSA Bank Bill Index.
The Cash Investment Option invests in:
- cash (deposits with a bank)
- Australian-dollar-denominated money market securities that are issued or guaranteed by a government, bank or corporate entity with a minimum credit rating of AA (or its floating rate equivalent), as determined by Standard & Poor’s (or the equivalent from Moody’s or Fitch if no Standard & Poor’s rating is available)
- interest rate futures and options traded on the Sydney Futures Exchange.
| Asset allocation | At 30 June 2009 | At 30 June 2010 |
| Cash | 100% | 100% |
Cash Investment Option
Funds under management
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Fund performance
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All performance information is after tax and fees
ARIA determines an earning rate for the Cash Investment Option every business day, and earnings are allocated to members’ accounts monthly. The daily rates are used to calculate entitlements for members exiting the CSS.
For more information about our investment performance, see the Investments section of our CSS website.
Cash Investment Option earning rates
Over the five years ending 30 June 2010, the compound average rate of earnings (after tax and fees) for the Cash Investment Option is 4.8% per annum.
| Year | Earning rate (after tax and fees) |
Inflation rate |
| 2005/06 | 4.9% | 4.0% |
| 2006/07 | 5.4% | 2.1% |
| 2007/08 | 6.1% | 4.5% |
| 2008/09 | 4.6% | 1.5% |
| 2009/10 | 3.2% | 3.1% |
