CSS Fund Performance for June 2007

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 Default Fund Earning Rate as at end June 2007 (%)    

* this is an unaudited 30 June value

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

All Earning Rates are after fees and tax

Month to date earning rate history

Commentary:  

The 2006/07 financial year was the fourth successive year in which the Fund achieved a double digit return. The following chart shows the Fund’s real (i.e. after inflation) return over various time periods compared with its medium to long term real return target of 4.5% p.a.  The strategic asset allocation of the Fund was altered in 2002, reducing the allocation to growth assets. This resulted in the Fund taking on the characteristics of a Balanced fund, rather than a Growth fund. 

Over the year ending June, the Australian equity market rose by 29%, with the strongest gains achieved by stocks within the information technology sector (up 55%), telecommunication sector (up 40%) and industrials sector (up 40%). International equities in hedged terms rose by 21%, a result that again lagged the Australian market’s rise. The Australian property market also posted very positive returns (listed up 26%, unlisted up 19%), but bond markets (Australia up 4.0%, international up 5.9%) underperformed cash (up 6.4%) due to a rise in global bond yields.

CSS Cash Investment Option  

Table 3: The CSS Cash Investment Option Fund Earning Rate as at end June 2007 (%)

* this is an unaudited 30 June value

 Table 4: Historical Fund Earning Rates over the last five years (% p.a.)  

All Earning Rates are after fees and tax

Month to date earning rate history

Commentary:

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

Alison Tarditi
CIO
12 July 2007