Fund Performance for August 2006

Welcome to the monthly update on your Fund's investment performance.

ARIA's primary responsibility is the management and investment of the CSS Fund in the equitable and best interests of all members. ARIA approaches this task by setting an investment objective to maximise the real returns earned on investments subject to a tolerable level of short-term volatility.  

CSS default Fund  

Table 1: The CSS in 2006-07 as at end August 2006 (%)  

Asset Class

Asset Allocation as at end August 2006

Fund Return July to August 2006

Benchmark Return July to August 2006

Australian shares

31

1.0

1.1

International shares

22

2.4

3.6

Long/Short equities

5

1.0

2.6

Property

14

-1.0

0.8

International Bonds

14

1.6

2.8

Market Neutral strategies

10

1.4

1.6

Cash

4

1.0

1.0

Total Fund

100

1.0

1.9

The return numbers in the table above are after fees and before tax, except for the Total Fund return number which is after both fees and taxes. Benchmark numbers are before fees and taxes.

The asset class sector benchmark return numbers show the market performance of the sector, while the Fund return numbers show what your Fund's performance was in that sector.

Table 2: Historical Fund Returns over the last five years (% p.a.)

Year

Return

2001-2002

-5.6

2002-2003

3.0

2003-2004

13.9

2004-2005

13.9

2005-2006

13.3*

* unaudited

Commentary:  

International equity markets have started the new financial year strongly, taking heart from an apparent peaking in US interest rates. Australian equities have been more mixed with a weak July more than offset by a bounce in August.

Global fixed interest markets have also benefited from the plateauing (for the moment at least) in US interest rates. The Fund's property return was affected by a write down in the value of a major asset by one of the managers and by some acquisition costs involved in taking the under-weight property exposure closer to benchmark weight.

The after-tax return for the two months of 1.0% was below the benchmark return of 1.9%.

  CSS Cash Investment Option  

Table 3: The CSS Cash Investment Option in 2006/2007 as at end August 2006 (%)

The Fund return in the table below is after fees and tax, whereas the Benchmark return is before fees and tax.

Fund Return July/ August 2006

Benchmark Return
July to August 2006

0.8

1.0

Table 4: Historical Fund Returns (%)  


Year

Return

2004-2005 (7 months to 30 June 2005)

2.7

2005-2006

4.9*

*unaudited

Commentary:

The Cash Investment Option continues to deliver returns in line with the benchmark return once account is taken of fees and taxes.

Andre Morony
CIO
22 September 2006