Conservative Balanced

The Conservative Balanced strategy generally invests a proportion of its funds in growth assets such as Australian and international equities and property, semi liquids and private equity and the balance in income-producing assets, such as interest-bearing securities. This combination offers real investment growth above the CPI rate over a 10-year period. There are more assets that produce income, which makes the strategy more stable than the High-Growth and Balanced Growth strategies.

Objective

2.0% above CPI

Risk Profile

Medium to High

Time horizon

7 years

Glossary of investment terms

Below is a short explanation of some of the terms used on this page. 

Objective: The investment results the fund aims to achieve over a set timeframe.

Portfolio: A group of investments managed in accordance with a specified mandate, i.e. specified rules and instructions.  

Asset class: A category of financial assets. The major classes are shares, property, fixed interest and cash, which in turn can be broken down to include Australian or international shares, Australian and international fixed interest and direct and indirect property. All asset classes have different risk and return characteristics.

% of total investment: shows the % of the investment option that is invested in this asset class. 

% of asset class: shows the % of the asset class for all options that is invested in the displayed company and option.

ASSET CLASS DESCRIPTORS

Australian Equities: Investments in shares of companies listed on the Australian Stock Exchange. Offers potential for capital growth and also generates income in the form of dividends. This class accounts for between 8 - 28% of the strategy.

International Equities: Investments in shares of companies listed on different stock exchanges around the world. Offers potential for capital growth and also generates income in the form of dividends. This class accounts for between 8 - 28% of the strategy.

Australian Direct Property: Direct investments in Australian office buildings, shopping centres, industrial facilities and wholesale property funds. Unlisted direct property has a stable return and low correlation to more traditional asset classes. This class accounts for between 0 - 10% of the strategy. 

International Listed Property: Provides diversification through shares in professionally managed real estate investment trusts (REIT’s) across developed countries. Includes investments in traditional real estate sectors as well as alternative asset classes like self-storage, healthcare and datacenters. This class accounts for between 0 - 10% of the strategy. 

Private Equity: Investments in private companies (companies that are not publicly listed). Income is received from the profits made by these companies via their investments. This class accounts for between 1 - 11% of the strategy. 

Private Credit: Privately negotiated loans and debt-financing from non-bank lenders. Also known as ‘direct lending’ or ‘private lending’. Income is received from the interest charged. This class accounts for between 0 - 5% of the strategy. 

Growth Alternatives: Investments that sit outside of, and behave differently from, traditional asset classes, e.g. hedge funds, managed futures, derivatives contracts, commodities. This class accounts for between 0 - 5% of the strategy. 

Short-Term Fixed interest: Investments that pay out a set level of cash flow to investors, typically in the form of a fixed interest or dividends. This class accounts for between 6 - 26% of the strategy.

Liquid Alternatives: Alternative investment vehicles that provide diversification and are highly liquid - can be bought and sold daily. Examples include mutual funds or exchange traded funds. This class accounts for between 0 - 5% of the strategy. 

Bonds: Fixed-income instruments that represent a loan made by an investor to a borrower, typically a government or a corporation. A defensive asset, bonds are less risky than growth assets like shares and property. This class accounts for between 11 - 31% of the strategy. 

Infrastructure: Investments in physical assets and related operations that provide businesses and society with essential services e.g. roads, airports, transport and utilities. This class accounts for between 0 - 10% of the strategy. 

Managed Cash: A traditionally conservative investment class that provides steady returns. Value fluctuates with interest rates. Returns tend to be the lowest of all asset classes over time. This class accounts for between 0 - 10% of the strategy. 

Illiquid Assets: The combined investments in Illiquid Assets will not exceed 30%. Illiquid assets are defined as follows: Australian Direct Property; Private Equity; Private Credit; Growth Alternative except Attunga Fund; Infrastructure; International Equities (Only Challenger Index Plus Fund)

OTHER ASSETS

Challenger Index Plus Mandates: A return guaranteed termed product provided by Challenger and benchmarked against MSCI ACWI ex Australia 40% hedged to AUD

Pendal Smaller Companies Trust: An actively managed portfolio by Pendal investing in companies outside the top 100 listed on the ASX

JPM Liquidity: A liquidity product managed by JPM, funds held in this product can be redeemed same day.