The Fund is a defined contribution fund which means that the contributions to the fund are known but the benefits that members receive when they leave the fund are unknown. This is because the benefits that are payable are determined by the net contributions paid towards members’ retirement savings plus (or minus) investment earnings over the period of their membership of the Fund.
Members therefore carry the investment risk, because their benefits will ultimately be determined by the underlying performance of the fund’s investments. The investment returns earned on the assets of a defined contribution fund are allocated directly to members’ benefits. Although your benefit should ultimately increase in value over the long term, it will fluctuate (increase or decrease) in value in the short term as a result of the movements in the underlying value of the fund’s investments, such as the stock market.
Investment Philosophy
The core principles of the revised investment philosophy and strategy can be summarized as follows:
- Aim to achieve an investment return equal to CPI +5% per annum over rolling 3-year periods;
- Actively reduce risk without reducing the investment return objective;
- Improve and simplify the administration fop the Fund’s investments; and
- Reduce investment management costs.
- An annual fund declaration is performed by the Trustees at the end of each financial year.
Based on this Investment Philosophy, the Trustees of the Fund decided the following:
- No Individual Member Investment Choice will be offered at this stage;
- A uniform investment strategy will be utilised for all members of the Fund; and
- The Old Mutual Multi-Managers Growth Portfolio is the most appropriate investment portfolio for the Fund at this stage.
Accordingly, the Trustees selected the Old Mutual Multi-Managers Growth Portfolio as the Fund’s default investment strategy.
The characteristics of the Old Mutual Multi-Managers Growth Portfolio can be summarised as follows:
Please refer to the latest Annual Trustee Report for more information on investment returns over the past 2 decades.
For further information on these investment portfolios, please download or view the Fund Fact Sheets: