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Indexed Balanced Investment Option

Hostplus’ Indexed Balanced Option is one of the lowest-cost diversified options available in the market today. It employs passive investment management strategies across a mix of growth and defensive assets to target index-like returns for each underlying asset class.

This option is managed by some of the largest and most iconic investment managers in the world, including IFM Investors, BlackRock and Citi.

The Indexed Balanced Option is globally diversified across International Equities (partially hedged to reduce the amount of foreign currency exposure), Australian Equities, International Fixed Interest, Australian Fixed Interest and cash asset classes.

The benchmarks used for this option include the S&P/ASX 200 Accumulation Index, MSCI World ex-Australia Index, Barclays Global Aggregate Index (hedged in AUD with net dividends reinvested), Bloomberg AusBond Composite All Maturities Index and Bloomberg AusBond Bank Bill Index. 

Strategic Asset Allocation and Range

Indexed Balanced

Target return

Accumulation:
CPI plus 2.5% p.a. on average over 20 years
Pension:
CPI plus 3.5% p.a. on average over 20 years

Investment risk1

High (Negative returns expected in between 4 to less than 6 out of every 20 years)

Investment style

Investments through diversified investment portfolio, including some growth assets and some lower risk investments.

Investment objective

This option is diversified across a range of growth and defensive assets and aims to produce consistent returns over time.
This option may suit Accumulation investors who have a seven year plus investment time horizon.
This option may suit Pension investors who have a six year plus investment time horizon.

Minimum suggested investment time frame2

Accumulation:
7 + years
Pension:
6 + years

Asset allocation guidelines

Asset Class

Range

Strategic Asset Allocation Benchmark

Australian Shares

25 – 55%

32%

International Shares - Developed Markets

25 – 55%

43%

International Shares - Emerging Markets

0 – 10%

0%

Diversified Fixed Interest

10 – 30%

15%

Cash

0 – 20%

10%

75%: Growth Assets
25%: Defensive Assets

1. The level of investment risk is based on an industry-wide Standard Risk Measure. It shows the number of expected negative annual returns over a 20-year period.
2. The Minimum Suggested Investment Time Frame is based on the risk and return profile of this option. The time frame considers volatility and the likelihood of negative annual returns in any one year.


Investment Managers as at March 2019:

  • IFM Investors Pty Ltd (Enhanced Indexed)
  • IFM Investors Pty Ltd (Indexed Global Equities)
  • iShares Global Bond Index Fund – BlackRock Asset Management Australia Limited
  • iShares Wholesale Aust Bond Index Fund – BlackRock Asset Management Australia Limited
  • Citigroup Pty Ltd (Cash)

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