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.
Indexed Balanced Option - Summary:
- Investment objective: CPI plus 3.0% p.a. over 20 years
- Investment risk: High (negative returns expected in between 4 to 6 out of every 20 years)
- Investment style: Highly diversified market coverage via low-cost passive management confined to the equities, fixed interest and cash asset classes
- Minimum suggested investment time frame: 7+ years
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 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.
Strategic Asset Allocation and Range
| Range | SAA Benchmark | |
|---|---|---|
| Growth assets | 75% | |
| - Australian shares | 25 - 55% | 32% |
| - International shares | ||
|
Developed Markets |
25 - 55% | 43% |
|
Emerging Markets |
0 - 10% | 0% |
| Defensive assets | 25% | |
| Fixed income | 10 - 30% | 15% |
| Cash | 0 - 20% | 10% |
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)
