investment strategy
All investments must balance potential risk (volatility) against possible returns. There are two classes of assets: growth assets (e.g. shares, property and global trading strategies) and defensive assets (e.g. cash and bonds). Growth assets are more risky (volatile) but have the potential to provide a higher expected return. On the other hand, defensive assets are less risky (volatile) but the cost is a lower expected return.
For each investment option, an overall objective has been defined by the Trustee, together with a set of investment objectives (covering return and risk).
A brief description of each investment option follows:
- Super Growth
- Trustee Super Balanced
- Super Stable
- Super Cash
- Australian Shares (Elite only)
- International Shares (Elite only)
- Australian Property (Elite only)
- Global Property (Elite only)
- Fixed Income (Elite only)
More comprehensive information on how the REI Super options are managed is available in the Investment Policy Statement.
super growth
Primary objective
To provide Members with a top performing diversified growth style investment.
Investment objectives
To earn a rate of return, after tax and fees that exceeds CPI by at least 4% per annum over the average time expected to be spent by Members in the workforce.
Risk profile - High
The Super Growth investment option is designed for Members who want higher potential returns and who are more comfortable with greater fluctuations in returns. This option invests only in growth assets and has the potential for the highest return over the long term. However, returns will vary and are expected in some years to be low or negative.
To provide an illustration of the risk profile, based on the last 30 years of market data, this option would have delivered a positive return on average in around 4 out of every 5 years.
| Asset Class | Target Allocation % | Min/Max range % |
| Australian Shares | 49.5 | 39.5 - 59.5 |
| International Shares (Unhedged) | 14 | 4 - 24 |
| International Shares (Hedged) | 14 | 4 - 24 |
| Australian Property Securities | 9.5 | 0 - 19.5 |
| International Property Securities | 4 | 0 - 14 |
| Alternatives | 8 | 0 - 18 |
| Cash | 1 | 0 - 11 |
| Total | 100 | N/A |
| Total growth assets | 99 | 89 - 100 |
| Total defensive assets | 1 | 0 - 11 |
back to topTrustee Super Balanced
Primary objective
To provide Members with a top performing growth-oriented diversified investment.
Investment objectives
To earn a rate of return, after tax and fees that exceeds CPI by at least 3% per annum over the average time expected to be spent by Members in the workforce.
Risk profile: Medium to High
The Trustee Super Balanced investment option is designed for Members who prefer to accept a medium to high potential return for medium risks. This option invests mainly in growth assets, with some defensive assets. It has potential for high returns over time due to the significant proportion of growth assets. However, returns will vary and are expected in some years to be low or negative, although to a lesser degree than the Super Growth option.
To provide an illustration of the risk profile, based on the last 30 years of market data, this option would have delivered a positive return on average in around 5 out of every 6 years.
| Asset Class | Target Allocation % | Min/Max range % |
| Australian Shares | 38 | 28 - 48 |
| International Shares (Unhedged) | 10 | 0 - 20 |
| International Shares (Hedged | 10 | 0 - 20 |
| Australian Property Securities | 8 | 0 - 18 |
| International Property Securities | 3 | 0 - 13 |
| Australian Bonds | 9 | 0 - 19 |
| International Bonds (Hedged) | 6 | 0 - 16 |
| Global Inflation Linked Securities | 3 | 0 - 13 |
| Alternatives | 8 | 0 - 18 |
| Cash | 5 | 0 - 15 |
| Total | 100 | N/A |
| Total growth assets | 77 | 28 - 100 |
| Total defensive assets | 23 | 0 - 72 |
super stable
Primary objective
To provide Members with a top performing, conservative diversified investment option.
Investment objectives
To earn a rate of return after tax and fees that exceeds CPI by at least 1% pa over rolling 3-year periods.
Risk profile - Medium to Low
The Super Stable investment option is designed for Members who require more stable returns. This option invests mainly in interest bearing assets (cash and bonds), with some growth assets (shares and property).
Returns have the potential to be higher than just investing in cash investments. Returns will vary and there is a still a slight possibility of delivering a negative return in any one year, but are likely to be more stable than options with a higher proportion to growth assets.
To provide an illustration of the risk profile, based on the last 30 years of market data, this option would have delivered a positive return on average in around 20 out of every 21 years.
| Asset Class | Target Allocation % | Min/Max range % |
| Australian Shares | 17 | 0 - 27 |
| International Shares (Unhedged) | 5 | 0 - 20 |
| International Shares (Hedged) | 5 | 0 - 20 |
| Australian Property Securities | 3 | 0 - 14 |
| International Property Securities | 1 | 0 - 14 |
| Australian Bonds | 17 | 0 - 27 |
| International Bonds (Hedged) | 11 | 0 - 30 |
| Global Inflation Linked Securities | 6 | 0 - 16 |
| Alternatives | 7 | 0 - 25 |
| Cash | 28 | 12 - 38 |
| Total | 100 | N/A |
| Total growth assets | 38 | 0 - 88 |
| Total defensive assets | 62 | 12 - 100 |
super cash
Primary objective
To provide Members with a secure investment that has a very high chance of capital being preserved over any 12 month period, after fees and tax.
Investment objectives
To match and where possible enhance performance relative to the benchmark over rolling 3 year periods.
The Super Cash investment option is designed for Members who seek a lower potential return in exchange for low risk.
Risk profile - Low
Returns will be comparatively stable, with only a negligible risk of delivering a negative return in any one year.
| Asset Class | Target Allocation % | Min/Max range % |
| Australian Shares | 0 | N/A |
| International Shares | 0 | N/A |
| Australian Property | 0 | N/A |
| Global Property | 0 | N/A |
| Australian Bonds | 0 | N/A |
| International Bonds Hedged | 0 | N/A |
| Cash | 100 | |
| Total | 100 |
australian shares
Primary objective
To provide Members with a top quality, professionally managed diversified Australian Shares Investment.
Investment objectives
To earn a rate of return, (gross of fees and tax) above benchmark over rolling 5 year periods within a clearly defined risk profile. The benchmark is the S&P/ASX 300 Accumulation Index.
Risk profile - High
The Australian Shares investment option is designed for Members who want higher potential returns and are more comfortable with greater fluctuations in returns.
This option invests only in growth assets (Australian Shares) and has the potential for high returns over the long term. However, returns will vary and are expected in some years to be negative.
Investment mix
- 100% Intech Australian Shares Active Trust
international shares
Primary objective
To provide Members with a top quality professionally managed diversified international shares investment.
Investment objectives
To earn a rate of return (gross of fees and tax) above benchmark over rolling 5 year periods within a clearly defined risk profile. The benchmark is the MSCI World ex-Australia with net dividends reinvested (50% hedged into $A).
Risk Profile - High
The International Shares investment option is designed for Members who want higher potential returns and who are more comfortable with greater fluctuations in returns.
This option invests only in growth assets (international shares) and has the potential for high returns over the long term. However, returns will vary and are expected in some years to be low or negative.
Investment mix
- 50% Intech International Shares Active Trust (Unhedged)
- 50% Intech International Shares Active Trust (Hedged)
australian property
Primary objective
To provide Members with a top quality professionally managed diversified domestic property securities investment.
Investment objectives
To match and where possible, enhance performance relative to the benchmark (gross of fees and tax) over rolling 5 year periods. The benchmark is the S&P/ASX 300 Property Accumulation Index.
Risk Profile - Medium to High
The Australian Property investment option is designed for Members who want higher potential returns and who are more comfortable with greater fluctuations in returns.
This option invests only in growth assets (Australian Listed Property) and has the potential for high returns over the long term. However, returns will vary and are expected in some years to be low or negative.
Investment Mix
- 100% Intech Australian Property Securities Trust.
global property
Primary objective
To provide Members with a top quality professionally managed diversified global property securities investment.
Investment objectives
To earn a rate of return (gross of fees and tax) above benchmark over rolling 5 year periods. The benchmark is the UBS Global (ex-Australia) Property Investors Index (fully hedged into A$).
Risk profile - Medium to High
The Global Property investment option is designed for Members who want higher potential returns and who are more comfortable with greater fluctuations in returns. This option invests only in growth assets (Global listed property) and has the potential for high returns over the long term. However, returns will vary and are expected in some years to be low or negative.
Investment Mix
- 100% Intech International Property Securities (Hedged) Trust
fixed income
Primary Objective
To provide Members with a top quality professionally managed bond and fixed interest investment.
Investment objectives
To earn a rate of return (gross of fees and tax) above benchmark over rolling 3 year periods. The benchmark is 50% UBS Government Bond (All maturities) Index, and 50% Lehman Global Aggregate (hedged into $A) Index.
Risk profile - Medium to Low
The Fixed Income investment option is designed for Members who require more stable returns. This option invests in interest bearing assets (bonds), with possibly a small amount of cash. Returns have the potential to be higher than just investing in cash investments. Returns will vary and there is the slight possibility of delivering a negative return in any one year, but are likely to be more stable than options with a higher proportion to growth assets.
Investment Mix
- 50% Intech Australian Bond Trust (Passive)
- 40% Intech International Bond Active Trust (Hedged)
- 10% Intech International Bond Trust (Hedged) (Passive)
default investment option
Members who do not choose an investment option will have their account balance invested in the Trustee Super Balanced option.
peer group objectives
The REI Super Trustee aims to deliver competitive investment performance to Members over the medium-to-long term (typically rolling 3-year periods).
To measure its success, the Trustee looks at the performance and risk characteristics of REI Super’s investment options against a range of industry surveys and comparable funds. Currently, the primary survey the Trustee uses to assess the performance of the REI Super investment options is the Intech Investor Choice Survey.
summary
The investment objectives of the four main options' primary investment options can be summarised as follows:
|
Option |
Return objective |
Negative 12 month return expectation |
| Super Growth | CPI+4% over 30 years | 1 in 5 years |
| Trustee Super Balanced | CPI+3% over 30 years | 1 in 6 years |
| Super Stable | CPI+1% over rolling 3 year periods | 1 in 21 years |
| Super Cash | CPI over 1 year | negligible |