CSS Default fund

Investment objectives

To maximise the long-term real return within certain risk constraints.

Investment strategy

The strategic asset allocation of the Default Fund option is designed to maximise the number of different types of investments that tend to perform independently of each other. By embracing the benefits of diversification, the Default Fund tries to reduce its reliance on equity market returns and therefore provide a smoother pattern of long-term returns.

Asset allocation

Default Fund Pie Chart
Australian equity 26.5%
International equity 28.5%
Long/short equity funds 1.9%
Real assets 12.7%
Alternatives 13.9%
Fixed income 11.6%
Cash 4.9%
As at 30 June 2011
Funds in this asset class are invested in the Australian money market in investments such as term deposits and securities.
Investing in Fixed income involves lending money to governments and companies through the purchase of bonds. Bonds can take a variety of forms. Generally the face value of the bond will be repaid on a set date and a fixed rate of interest is paid during the term. Over the longer term, Fixed income investments generally offer a higher rate of return than cash for a moderately higher risk.
Investing in Alternatives means investing in typically active strategies across various financial markets and securities. The returns from such investments typically have a lower correlation with returns from equity markets. In this way, these strategies can provide diversification benefits to investments in shares but can be more reliant on the skill level of the fund managers implementing these strategies. An Alternatives manager can invest globally in many different types of financial securities, such as equities, fixed income, foreign exchange, derivatives, commodities etc, according to their strategy and specialty.
Investing in Real assets involves investments in established buildings and properties, either in the retail, office or industrial sector. It can also include investments in property trusts and property companies, which is then pooled with other investors' funds to purchase large properties. The investment returns on property come from rent and changes to property values over time. Property generally has lower returns than, for example, Australian shares, and involves moderate risk.
Investing in Long/short equity is similar to investing in International equity except that our managers can sell as well as buy the companies.
Investing in International equity means investing in the ownership of companies based overseas. The return on investments comes from the profits of these companies through the form of dividends and share price fluctuations. Returns can also be affected by foreign currency movements. Compared with investing in Australian equity, International equities can offer a much broader range of companies and opportunities to invest in, but are also exposed to different risks. These returns can be very volatile and considered high risk in the short term but may offer higher returns over the longer term.
Investing in Australian equity means investing in the ownership of Australian companies. The return on investments come from the profits of these companies through the form of dividends and share price fluctuations. These returns can be very volatile and considered high risk in the short term but may offer higher returns over the longer term.

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Risk level

risk level graph

 

Investment time frame

investment time frame graph

 

Historical performance

Feb 11
%
Mar 11
%
Apr 11
%
May 11
%
Jun 11
%
Jul 11
%
Aug 11
%
Sep 11
%
Oct 11
%
Nov 11
%
Dec 11
%
Jan 12
%
1.107 -0.106 0.254 -0.187 -0.477 -1.263 -1.425 -1.312 3.715 -1.870 0.365 2.200

1 July to
31 January 2012
%
1 year to
30 June 2011
%
5 years to
30 June 2011
(annualised) %
10 years to
30 June 2011
(annualised) %
0.3 7.5 2.4 4.9
  1. The investment option shown above started 1 July 1990.
  2. Remember, past performance is no indication of future performance.
  3. Monthly performance figures cannot be added together to determine annual or cumulative year-to-date performance.
  4. To see investment returns for any funds ARIA manages go to www.aria.gov.au.