HOSTPLUS Executive Member Guide

We recognise that you may want to take more control of your money and choose where your super is invested. With 19 different investment options to choose from, you can mix and match as you wish.

To help you understand the importance of having the right investment mix, read our Introduction to investing, then compare our investment options:pre-mixed options, sector investment options and individual manager options.

You can choose how your super is invested online through your SuperSite account at www.hostplusexecutive.com.au or complete the Investment choice form available at www.hostplusexecutive.com.au and forward it to us. If you don’t make an investment choice, we’ll invest your super in our Balanced investment option.

Change your existing investment only – this means that only your current balance will be invested in the investment option of your choice. All future cashflows* will be applied to the future investment option.

Change your future investment only – this means that only your future investments will be invested in the investment option of your choice. The investment strategy applying to any current balance will not be altered. All future cashflows* will be applied to your future investment option.

Change your future investment and existing investment – this means that all your current balance and future investment will be invested in the investment option of your choice. All future cashflows* will be applied to your future investment option.

Make a one-off contribution or rollover investment choice only – this means that your one-off contribution or rollover will be invested in the investment option of your choice. The investment strategy applying to any current balance or your selected future investment will not be altered and all future cashflows* will be applied to your future investment option.

Please note that if you request a switch of your existing balance at any time after a one-off contribution or rollover, these monies will be considered part of your existing balance and will subsequently be moved in accordance with your switch request.

*Cashflows include taxes, fees and charges incurred on your account and are deducted from your nominated future investment. If you do not have sufficient funds in your future investment when cashflows are deducted this may result in a negative value. However, your overall balance will not be affected by this cashflow deduction.

When you make a choice, HOSTPLUS Executive does not acquire an interest in the investment option on your behalf. Instead, you are notionally invested in the investment option. As part of our investment strategy, we would have predetermined an amount to be invested with any particular investment manager. Therefore, we have pre-existing contractual relationships with our underlying investment managers. We select managers and invest money with them via direct investment mandates or pooled trusts.

Accordingly, the investment managers provide the trustee with financial services. But they do not have a contractual relationship with our members.

As a member of HOSTPLUS Executive, you receive the notional net investment earnings (positive or negative) allocated to your member account. This is made up of a combined earning rate of the underlying investment manager(s) from your selected investment option, less any applicable fees and taxes.

For example, HOSTPLUS Executive may have invested $10 million in Balanced Equity Management – Australian Shares. A member then exercises investment choice, and directs us to invest $10,000 of their account balance in that investment option. We do not invest a further $10,000 (on top of the $10 million already invested), but notionally allocate the net investment earnings received from that investment option to the member’s account.

We may in our absolute discretion vary the available investment options from time to time by adding or removing investment options. Please refer to Change of investment managers for further information on what happens if we change an individual investment manager.

You can choose one or more of any of the investment options. For example, you can have 50% notionally invested in Shares Plus (Pre-mixed option), 25% in Property (Sector investment option) and 25% invested in Paradice Investment Management (Small Cap) (Individual manager option). The only requirement is that you must have a minimum of 1% in any selected option.

Three easy steps to help you make your investment choice
1	Learn how the process works by reading this section and determine your investment style.
2	Take a look at the investment options offered by HOSTPLUS Executive.
3	Make your investment choice online through your SuperSite account at www.hostplusexecutive.com.au or complete the Investment choice form available at www.hostplusexecutive.com.au and forward it to us.

Please ensure you consider your individual portfolio (including assets/investments outside of superannuation) to minimise risks associated with investments that are not diversified in their own right.

With HOSTPLUS Executive, you’re not locked into an investment option once you’ve made a choice. After all, your circumstances may change, your investment outlook may change or you may simply want to opt for a different approach. Switching is easy and free.

You can switch between investment options as often as you like without charge. When you switch, your request will become effective on the following Monday. You can indicate your switch online through your SuperSite account at  www.hostplusexecutive.com.au or by completing the Investment choice form available at www.hostplusexecutive.com.au

Note: If your completed request is received in the HOSTPLUS Executive Melbourne office before 4pm on a Friday, or in the case of online switches by 11.59pm Melbourne time on a Sunday, it will generally be processed the following Wednesday and back-dated to Monday.

In the case of multiple investment switch requests received in the same week, your latest request received will apply from the following Monday. Where you have made an investment switch request as well as a benefit payment request in the same week, the benefit payment instruction will override the investment switch and therefore your existing investment choice will apply. In the case of a partial benefit request, it will also override the latest investment switch for that partial amount. The investment choice switch will however apply to the remaining balance.

Switch requests submitted between late December and early February and between late June and early August may not be processed immediately due to system delays as a result of allocating earning rates to members’ accounts. You may still submit a switch request during this time and your switch request will still receive the correct effective date (for example the Monday immediately after your switch request was received).

Before making your investment choices, you should consider:

• your attitude to risk and return
• your age and how long you will be investing for
• how prepared you are to accept variable returns in the short term in the interest of possibly getting a better potential long term result
• your attitude to the different types of investments
• other investments you may have and your future financial plans

It also pays to do your homework. You could start with a licensed financial adviser. Find out more about Industry Fund Financial Planning at www.hostplusexecutive.com.au

You can invest your super in different types of assets. An asset is an investment used to gain a return. Assets are divided into asset classes such as cash, fixed interest, property, unlisted assets and shares. They are generally described as ‘growth’ or ‘defensive’.

• Growth assets. Growth assets generally provide relatively higher returns over the longer term with a corresponding higher level of risk (increased chance of a negative return and volatility). A high proportion of their returns are derived from capital growth. Examples include shares and some property investments.
• Defensive assets. Defensive assets generally are lower risk (less chance of a negative return), with a corresponding expectation of lower returns over the longer term. A high proportion of their returns are derived from income (cash) flows. Examples include cash and some fixed interest investments. Asset classes, such as some unlisted assets (which can include infrastructure, property and alternatives) may have defensive characteristics. Where unlisted assets (which can include infrastructure, property and alternatives) derive a high proportion of their returns from strong income (cash) flows rather than capital growth, these assets may be classified as defensive. Where they derive a high proportion of their returns from capital growth rather than income (cash) flows these assets may be classified as growth.
• Growth versus defensive assets. Investment markets are difficult, if not impossible, to predict. Often, different asset classes will not all perform well or poorly at the same time because they react differently to influences such as economic growth, inflation, interest rates and exchange rate movements. A change which is positive for one asset class can have a negative effect on another.

	Cash	Fixed interest	Property
What is it?	Cash investments may include deposits in a bank, investments in short-term money markets and other similar investments.	Usually a loan to a Government or business with the amount of interest and the length of the loan fixed in advance.	An investment in property or buildings, either directly or via property trusts.
How does the investment work?	Cash investments, such as your own bank account, don’t necessarily earn high returns, but they are usually very stable.	The investment is used to finance the operations of Governments, organisations or businesses, and is paid back on an agreed date with interest, which is also agreed or ‘fixed’ before the loan commences.	There are two ways that property can provide returns – by earning rental income (revenue) or by increasing in value over time (a capital gain). Property can also decrease in value resulting in a capital loss.
What's the risk/return?	Cash is considered to be the lowest-risk investment because of its limited potential to rise and fall in value over the short term. However, this perceived safety comes at a price – cash investments typically may not earn enough to meet long-term goals like retirement.	Fixed interest is seen as a moderate risk investment. If interest rates change during the term of the loan, there will be capital gains or losses. Fixed interest investments are generally less volatile over the short term than property or shares.	Property is considered a moderate to high risk investment. Returns rely on general economic factors like inflation, interest rates and employment, as well as location and quality. While returns are generally higher than cash or fixed interest, the value of property investments is also liable to change suddenly.

	Unlisted assets			Shares
	Alternatives	Infrastructure	Private equity
What is it?	Almost any non-traditional investment strategy could be classified as an alternative investment.	Infrastructure assets are generally equity holdings in transportation, communication, sewage, water and utility systems. These can also take the form of social infrastructure assets such as hospitals, schools and aged care facilities.	Private equity involves investments in entities or vehicles that are not listed on a stock exchange. They can be based in Australia and overseas.	Part-ownership of a company through holding shares.
How does the Investment work?	They generally aim to achieve a return objective, rather than to outperform a specific sector goal.	Investments in infrastructure can be through direct investments in single assets, listed or unlisted pooled funds and investment through a fund of funds vehicle.	Private equity investments are usually made to finance one or more stages of a company’s growth cycle, ranging from those in early stages of development to more mature businesses seeking capital. Private equity vehicles are used for many purposes including buying out the owners or founders of an existing business or asset.	Because shares represent a part of the company, returns vary according to how the company performs. Returns can come in two ways – dividends paid to shareholders (revenue) and the increase in value of the shares (capital gain). Shares can also decrease in value resulting in a capital loss.
What’s the risk/return?	Alternatives aim to produce returns in excess of cash over the long term. However its volatility over the long term is generally higher than that of fixed interest.	The investment objective for investing in infrastructure is typically to provide returns of inflation plus 6 – 8% per annum, but with the chance of a return that’s lower than Australian and international shares, over a 5 – 10 year term.	The private equity market is less efficient and less regulated than the listed market. This inefficiency creates opportunities for skilled managers to add value. Given the greater risk associated with private equity, a return premium of at least 4 – 5% above listed markets is generally considered necessary.	Inflation, interest rates, exchange rates (for international shares) and changes in market conditions will all have an effect on the value of shares, as does the performance of the company itself. Shares are considered the highest risk investment because they may experience significant changes in value. Despite their short-term volatility, shares have traditionally provided higher returns to investors – over the longer term – than all other asset classes.

Risk and return are related, so the lower the risk usually the lower the expected return (or the lower the likelihood of a negative return). 

For a higher possible return, you increase the risk and the possibility of a negative return from year to year.

As shown below, the risk/return profile of the asset classes can be roughly plotted on a graph. It is the mix of these asset classes in an investment portfolio that creates the risk/return expectation for that portfolio.

HOSTPLUS Executive investment options contain a mix of asset classes, to achieve their different risk/return objectives. 

Choosing to invest in sector investment options puts you in charge of selecting percentages of asset classes in your portfolio, depending on your investment objectives.

Just as the different asset classes explain some of the different types of investments, there are many investment styles that describe how an investment is made, not just the form it takes. Here are some of the more common investment styles.

Passive: Sometimes referred to as ‘index management’, passive management seeks to achieve investment performance that is equal to an index or market returns (like the S&P/ASX100, for example). Passive managers achieve this by replicating the relevant index. The investment manager does not make judgements on future market movements or which investments may grow in value, so the expenses associated with passive management are generally lower than other investment styles.    

Active: This is the opposite of passive management and seeks to achieve returns above an index or other set goal. Active managers achieve this through asset allocation and investment selection. Active management is often paired with growth or value investment styles.    

Enhanced passive: This investment style is between passive and active management. It is actively managed within the benchmark stocks but the risks are also tightly controlled. Enhanced indexing is essentially risk-controlled, active management.    

Growth: A growth manager seeks to achieve capital gains from investments in companies they expect will have future growth in earnings. Typically, growth managers care less about price-earnings ratio and other ways of assessing the value of an investment, but focus purely on the earnings potential of an investment.    

Value: Value managers seek to buy investments that are temporarily underpriced, and to take profits when they appear overpriced. The price-earnings ratio is a key valuation measure.    

Top-down: A form of analysis that begins with forecasting broad economic trends, then assessing the impact on industries and, finally, on individual companies. It is the opposite of bottom-up analysis.

Bottom-up: A form of analysis that begins with forecasting returns for individual companies, then moves to industries and finally the economy as a whole. It is the opposite of top-down analysis.

Investment markets are unpredictable. Past performance shows that over shorter periods, it’s almost impossible to predict which asset class will earn the highest rate of return. However, over the long-term, growth assets, like shares, have consistently earned a higher rate of return than defensive assets such as cash and fixed interest.

Looking at the Returns over 25 years by asset class table, you can see that the returns for growth assets are more unpredictable than the returns for defensive assets. Australian and international shares have usually provided the highest returns over the long-term. Clearly, someone who invested in these asset classes would have done better than someone who put all their money in cash or fixed interest over the same period.

While past performance gives no guarantee of future performance, it does give an insight into how each asset class has performed.

So, while it remains true that investment markets are hard to predict, different asset classes tend not to all move in the same direction, at the same time, or at the same speed. This is because the main asset classes react differently to influences such as growth, inflation, interest rates and exchange rates. A change that is good for one asset class can be bad for another. That’s why diversification is so important to investors. Using diversification you may capture the returns you want to keep, and reduce the volatility, or risk, you want to avoid.

It makes sense to diversify your investment mix – and with HOSTPLUS Executive it’s easy. We have provided a broad range of investment options which give you the opportunity to create your own mix based on your financial needs and personal circumstances.

Source: JANA Investment Advisors Pty Ltd

This is an example only and assumes $1,000 was invested on 1 July 1986 in each of the respective asset classes (using the relevant market indices – see Returns over 25 years by asset class) and all money earned has been reinvested. The valuations are nominal, don’t take into account CPI, tax payable or fees and are for illustrative purposes only. Actual investment returns are not guaranteed, and can be higher or lower than set out in this example. Past performance is not a guide to future performance.

Just because investment values fall, this doesn’t necessarily mean that your investment will lose money. You don’t actually lose money until you sell an investment for less than you paid for it. So, if you do have a year or two when your investment value falls, remember that if the strategy you have selected is for the long-term, then history has shown that investment markets usually go on to recover.

You wouldn’t consider selling your house if market values fell for a year or two. In the same way your super is a long-term investment and you shouldn’t be overly concerned with short-term fluctuations.

	Growth Assets			Defensive Assets
Year ending 30 June	Australian Shares	International Shares	Property	Fixed Interest	Cash
1987	51.4%	34.3%	18.0%	12.0%	2.5%
1988	-7.6%	-9.8%	29.1%	9.6%	12.5%
1989	4.8%	19.1%	24.6%	12.8%	15.7%
1990	4.1%	3.0%	11.9%	15.0%	18.5%
1991	5.2%	-1.9%	-8.1%	25.8%	13.5%
1992	13.5%	7.4%	-14.5%	18.3%	9.0%
1993	9.9%	31.8%	-5.0%	13.9%	5.9%
1994	18.5%	1.6%	7.0%	-1.1%	4.9%
1995	5.7%	14.7%	9.9%	11.9%	7.1%
1996	15.8%	7.1%	6.9%	9.5%	7.8%
1997	26.6%	29.1%	6.3%	16.8%	6.8%
1998	1.6%	42.7%	10.1%	10.9%	5.1%
1999	15.3%	8.9%	9.4%	3.3%	5.0%
2000	13.7%	23.8%	11.0%	6.2%	5.6%
2001	9.1%	-5.7%	10.3%	7.4%	6.1%
2002	-4.5%	-23.5%	9.9%	6.2%	4.7%
2003	-1.6%	-18.1%	11.1%	9.8%	5.0%
2004	21.7%	19.9%	11.9%	2.3%	5.3%
2005	26.0%	0.5%	13.4%	7.8%	5.6%
2006	24.0%	20.4%	17.2%	3.4%	5.8%
2007	29.2%	8.3%	19.0%	4.0%	6.4%
2008	-13.7%	-20.3%	14.5%	4.4%	7.3%
2009	-20.3%	-15.7%	-12.4%	10.8%	5.5%
2010	13.1%	5.2%	3.6%	7.9%	3.9%
2011	11.9%	2.7%	9.8%	5.6%	5.0%

Past performance is not a guide to future performance.

Source: JANA Investment Advisers Pty Ltd

Market indices: Australian shares – S&P/ASX300 Accumulation Index, International shares – MSCI World Ex-Australia Index (Unhedged), Property – Mercer Unlisted Property Trust Index, Fixed interest – UBS Composite Bond Index, Cash – UBS Bank Bill Index.

Assets

In investment terms, assets are investments used to gain a return. Assets are generally described as growth or defensive. They are also divided into asset classes such as cash, fixed interest, property, unlisted assets and shares (see 
(see Basic asset classes make up your investment portfolio).

Asset allocation 

This means the spread of investments within an investment portfolio. As part of the strategy of the portfolio, the assets should balance with each other to achieve the stated goal.

Custodian

An independent organisation that safeguards the fund’s assets. There are comprehensive rules governing who can issue instructions to the custodian, in particular how money can be released to investment managers.

Diversification
As the saying goes, it doesn’t pay to put all your eggs in one basket. The same is true for investing. The key to successfully managing risk is through diversification. Diversification means spreading your investments across a range of asset classes or types of investments so you have exposure to different market classes. This could help offset poor performance that may occur in any individual asset class. For example, if one asset class is not performing well, another asset class may be experiencing better returns helping to offset the losses of the poorer performing asset.

Emerging markets/countries
The financial markets of developing countries are known as ‘emerging markets/countries’. Emerging markets can be very volatile but have tremendous growth potential.

Inflation
Inflation is the increase in the general price level of goods and services in the economy. It is usually measured using the movements of the consumer price index (CPI).

Investment account
HOSTPLUS maintain an investment account for the sole purpose of temporarily holding investment earnings and paying investment related expenses until the net earnings can be allocated to members’ accounts during the 31 December or 30 June statement periods. HOSTPLUS does not use the investment account to smooth investment returns from one year to another.

Portfolio
A portfolio is a spread of investments across the various sectors, managed as a whole to achieve a particular investment strategy.

Returns
Returns may include both the income received from the investment and an increase or decrease in the capital value of the investment.

Volatility
The short-term fluctuations in share prices, exchange rates and interest rates that affect an investment. The higher the volatility, the less certain an investor is of the return within a time frame and hence volatility is one measure of risk.

.

The declared net fund earning rate is based on the actual investment performance data for the previous week ending Sunday, less any applicable fees and taxation. 

However, for the last two weeks of June the declared net fund earning rate may not be finalised until 20 to 25 business days after 30 June. 

For the last two weeks of December, the declared net fund earning rate may not be finalised until 20 to 25 business days after 31 December.

The declared net fund earning rate can be positive or negative depending on investment performance. A negative earning rate can result in a decrease in your account balance.

Generally, updates of the net fund earning rates are published on our website on the third business day of each week.

Please refer to How earnings are allocated to your account below for how and when earnings are allocated to your account.

Net fund earnings are allocated to your account:

• at 30 June and 31 December each year (a statement is sent to you usually in September and March respectively)    
• when you switch between investment options, or
• when you fully withdraw (exit) or fully transfer out of HOSTPLUS Executive

Declared net fund earning rates are calculated on the daily balance of your account and are compounded daily. This is important as it is likely that you will have different closing balances in your account throughout the year as a result of transactions in your account (contributions, taxation, insurance, member fees and so on).

Declared net fund earning rates are used to calculate the amount of earnings to be allocated to your account as at 30 June and 31 December each year.

All HOSTPLUS Executive investment periods begin on a Monday and end on a Sunday.

You can switch between investment options as often as once a week free of charge. 

When you switch between investment options, your request to switch is effective from the following Monday. 

Your switch request will receive the earning rate applicable for the end of the week in which your request was received.

All future cashflows will be applied to your future investment option. Cashflows may include taxes, fees and charges incurred on your account.

Note: If your completed request is received in the HOSTPLUS Executive Melbourne office before 4pm on a Friday, or in the case of online switches by 11.59pm Melbourne time on a Sunday, it will generally be processed the following Wednesday and back-dated to Monday.

If you exit the Fund, the latest available declared net fund earning rates are used to determine your account balance.

When you are invested only in the Balanced option

The latest available declared net fund earning rate will be used to allocate earnings for the amount of the partial withdrawal or partial transfer. However this rate may be adjusted (positively or negatively) with the actual declared net fund earning rate for the applicable period when the first of any of the following events occur:

• 30 June and 31 December each year (a statement is sent to you usually in September and March respectively)
• when you switch between investment options, or
• when you fully withdraw (exit) or fully transfer out of HOSTPLUS Executive.

When you have made an investment choice other than the Balanced option

Earnings are not allocated to your account at the time of a partial withdrawal or partial transfer out of the Fund. The amount of the partial withdrawal or partial transfer is simply withdrawn from your account at the time. Earnings will be allocated when the first of the following events occur:

• 30 June and 31 December each year (a statement is sent to you usually in September and March
respectively)
• when you switch between investment options, or
• when you fully withdraw (exit) or fully transfer out of HOSTPLUS Executive.

HOSTPLUS Executive generally announces its declared net fund earning rates on Wednesdays. 

When applying the declared net fund earning rate to your account, there may be adjustments made to your account balance to ensure the applicable amount of interest has been applied. 

The declared net fund earning rate can be positive or negative depending on the investment performance for the previous week. 

A negative earning rate can result in a reduction in your account balance.

Each investment option is designed with different investment objectives, strategies and risk profiles established by HOSTPLUS in consultation with our asset consultant, JANA Investment Advisers Pty Ltd (JANA). Together, we closely monitor and regularly review the performance of each investment as well as individual managers. Investment portfolios that make up the respective investment options are managed by professional, reputable managers selected by the trustee in consultation (where appropriate) with the trustee’s professional advisers including its asset consultant.

HOSTPLUS investments are held by a custodian, JPMorgan Chase Bank, N.A. They report on the performance of the investment managers selected by HOSTPLUS Executive. See 
Our investments and investment managers for a list of current HOSTPLUS investment managers.

HOSTPLUS is responsible for selecting investment managers, monitoring their progress and determining the overall investment profile. Sometimes, a decision may be made to remove an investment manager as a result of poor investment performance, change in key personnel, or a shift in a manager’s style or HOSTPLUS investment strategies.

When an investment manager is removed, a manager with a similar or different investment style can replace it. Alternatively, the assets in which that manager was investing may also be allocated to one or more of our existing managers.

HOSTPLUS may remove or replace investment managers as well as change the investment strategy or style of an individual manager from time to time. As part of HOSTPLUS fiduciary duties, investment managers are constantly reviewed and monitored. There may be circumstances where HOSTPLUS will decide to terminate an individual investment manager option at short notice or due to an unforseen event. In these instances, HOSTPLUS reserves the right to remove the individual investment manager option immediately and transfer the funds to the Cash option. HOSTPLUS will notify affected members of the change after the event, but within 30 days of the change. See Our investments and investment managers for a list of current HOSTPLUS investment managers. Please note that you can switch your investment choice at any time and at no cost.

The investment managers have their own policies on labour standards and environmental, social and ethical considerations, which may be taken into account when they make investment decisions. In turn HOSTPLUS Executive pays due consideration to the contents of these policies when selecting investment managers. As such, we take labour standards and environmental, social and ethical considerations into account when making investment decisions.

Labour standards (‘LS’) considerations, for this purpose, may include workplace health, safety and quality, child labour, slavery, human capital management, employee relations, diversity, access to medicine, as well as other matters.

Environmental, social and ethical (‘ESE’) considerations may include issues such as greenhouse gas emissions, climate change, renewable energy, depletion of energy resources, chemical pollution, waste management, depletion of fresh water, corruption, shareholder rights, business ethics, board diversity, government relations, disclosure, distribution of fair trade products, health and access to medicine, as well as a range of other matters.

HOSTPLUS Executive, as a signatory to United Nations’ Principles for Responsible Investment (‘PRI’), engages with its fund managers to take labour standards as well as the environmental, social and ethical considerations into account in their investment analysis and decision-making processes. HOSTPLUS Executiveis a member of the Australian Council of Superannuation Investors (ACSI), a body that seeks to raise the standards of governance in the companies in which superannuation funds invest.

Some activities in this area include:

• LS and ESE matters are addressed in the fund’s investment policy statements
• A number of investment managers take LS and ESE considerations into account in their decision-making processes including stock selection
• The fund’s investment adviser integrate these factors in their research (to the degree they feel appropriate given the particular investment under consideration)
• Shareholder voting rights are exercised in relation to various matters, including LS and ESE issues, as well as corporate governance issues, via ACSI’s voting alert service, to which the fund subscribes

We have an arm’s length commercial relationship with the companies we invest in. The trustee undertakes that it will not deal with any companies in which it has an interest, more favourably than it would deal with any other independent service provider.

The Balanced option is our default investment option which aims to achieve competitive, long-term investment performance for members. Our Balanced (default) option investment performance has outperformed the Median Balanced Option over the longer term, that is the past 5, 7 and 10 years according to the SuperRatings Fund Crediting Rate Survey (8 August 2011) as at 30 June 2011.

Period to 30 June 2011	Net fund earning rate p.a.
1 year	10.11%
3 year	1.13%
5 year	3.10%
7 year	6.30%
10 year	6.12%

Past performance is not a guide to future performance.

The 1 year performance figure is the net fund earning rate and the 3, 5, 7 and 10 year performance figures are the effective compound rates.

While HOSTPLUS Executive was introduced in 2005, the HOSTPLUS Executive investments are the same as the investments used in HOSTPLUS. We use the data from HOSTPLUS to give you a better understanding of how investments have previously performed.

Click here for a full explanation of our pre-mixed options, sector investment options and individual manager options showing their:

• objectives and strategies
• risk/return profile
• investment style
• asset mix, and
• past performance.

The At a glance: risk and return profiles graph shows you what risk and return profile can be expected for each asset class.

HOSTPLUS bases its objectives on professional advice from our independent asset consultant. The asset consultant takes into account the possible impact of economic forecasts on the different asset classes in which the options invest.

Investment strategies are developed by the HOSTPLUS board in conjunction with the asset consultant to create a high probability of attaining the outlined objective of each investment option.

Strategies are amended from time to time to reflect changing circumstances in different markets.    

The investment objectives are not an indicator of the future performance of the options, and in no way predict returns. They are provided in order to give members an indication of the level of net earnings that the options could produce based on the historical, long-term experience of the different asset classes in which the options invest.

However, past performance should not be used to predict future performance and investors should be aware that changing market conditions can cause the value of investments to change.

Capital Stable
Investment objectives and strategies	Achieve positive returns that exceed the return on cash over rolling three year periods. Provide stable returns through an asset mix that maximises the prospect of a positive rate of return each financial year. Achieve returns that are above the average returns of other similar funds.
Risk/return profile	Low to medium investment risk. Likelihood of a negative annual return in any one year: one in every 10 to 11 years.
Investment style	Most conservative and low-risk of the HOSTPLUS pre-mixed investment options.
Who this option would suit	This Option has a lower risk return profile than the Fund’s Default Option.  This Option may suit members who have a three to four year plus investment time horizon.
Minimum Investment Timeframe#	3 – 4 years +
Asset mix		Range	Benchmark
	Growth assets		30%
	Australian shares	5 – 20%	11%
	International shares	5 –15%	9%
	Unlisted assets
	– Infrastructure	0 –10%	4%
	– Private equity	0 – 5%	0%
	– Alternatives	0 –10%	1%
	Property	0 –10%	5%
	Defensive assets		70%
	Unlisted assets
	– Infrastructure	0 – 5%	1%
	– Alternatives	0 – 5%	2%
	Property	0 –15%	7%
	Australian fixed interest	10 – 30%	20%
	International fixed interest	10 – 30%	20%
	Cash	10 – 40%	20%
Past performance	Net fund earning rate to 30 June p.a.
	2011	8.9%
	2010	7.9%
	2009	-3.8%
	2008	3.1%
	2007	9.8%
	Compound average to 30 June 2011 p.a.
	3 year	4.2%
	5 year	5.0%
	10 year	6.0%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year.  

HOSTPLUS Executive was introduced in 2005, and uses the same investments as HOSTPLUS. We use the data from HOSTPLUS for the 10 year investment performance.

Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Conservative Balanced
Investment objectives and strategies	Achieve positive returns that exceed the return of the Capital Stable option over rolling three year periods. Provide a good prospect of positive returns each financial year. Achieve returns that are above the average returns of other similar funds.
Risk/return profile	Medium investment risk. Likelihood of a negative annual return in any one year: one in every five to six years.
Investment style	Contains roughly equal proportions of growth and defensive assets.
Who this option would suit	This Option is diversified across a range of growth and defensive assets, and has a lower risk return profile than the Fund’s Default Option.  This Option may suit members who have a five year plus investment time horizon.
Minimum Investment Timeframe#	5 years +
Asset mix		Range	Benchmark
	Growth assets		50%
	Australian shares	15 – 30%	21%
	International shares	10 – 25%	17%
	Unlisted assets
	– Infrastructure	0 –10%	4%
	– Private equity	0 –10%	2%
	– Alternatives	0 –10%	1%
	Property	0 –10%	5%
	Defensive assets		50%
	Unlisted assets
	– Infrastructure	0 – 5%	1%
	– Alternatives	0 – 5%	3%
	Property	0 –15%	8%
	Australian fixed interest	5 – 25%	14%
	International fixed interest	5 – 25%	14%
	Cash	5 – 20%	10%
Past performance	Net fund earning rate to 30 June p.a.
	2011	9.8%
	2010	8.5%
	2009	-6.5%
	2008	1.0%*
	2007	­–
	Compound average to 30 June 2011 p.a.
	3 year	3.7%
	5 year	–
	10 year	–

*This option was introduced on 1 October 2007, therefore this performance figure is for the nine months to 30 June 2008.

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Indexed Balanced
Investment objectives and strategies	Achieve investment returns that closely track index performance within each asset class to which this investment option has exposure.
Risk/return profile	Medium to high investment risk. Likelihood of a negative annual return in any one year: one in every four to five years.
Investment style	Investments through diversified investment portfolio, including some growth assets and some lower risk investments.
Who this option would suit	This Option is diversified across a range of growth and defensive assets and aims to produce consistent returns over time.  This Option may suit members who have a six year plus investment time horizon.
Minimum Investment Timeframe#	6 years +
Asset mix		Range	Benchmark
	Growth assets		75%
	Australian shares	25 – 55%	42%
	International shares	10 – 40%	33%
	Defensive assets		25%
	Australian fixed interest	0 – 20%	10%
	International fixed interest	0 – 20%	10%
	Cash	0 – 10%	5%
Past performance	Net fund earning rate to 30 June p.a.
	2011	1.95%*
	2010	–
	2009	–
	2008	–
	2007	­–
	Compound average to 30 June 2011 p.a.
	3 year	–
	5 year	–
	10 year	–

*This option was introduced on 1 December 2010, therefore this performance figure is for the seven months to 30 June 2011.

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Balanced (default)
Investment objectives and strategies	Achieve positive returns that exceed the return of the Conservative Balanced option over rolling three year periods. Maximise the prospect of positive returns each financial year. Achieve returns that are above the average return of other similar funds.
Risk/return profile	Medium to high investment risk. Likelihood of a negative annual return in any one year: one in every four to five years.
Investment style	Aims to produce consistent returns. Investments through diversified investment portfolio, including some growth assets and some lower risk investments.
Who this option would suit	This Option is diversified across a range of growth and defensive assets and aims to produce consistent returns over time.  This Option may suit members who have a six year plus investment time horizon.
Minimum Investment Timeframe#	6 years +
Asset mix		Range	Benchmark
	Growth assets		76%
	Australian shares	25 – 45%	33%
	International shares	10 – 30%	22%
	Unlisted assets
	– Infrastructure	0 – 10%	7%
	– Private equity	0 – 10%	5%
	– Alternatives	0 – 10%	3%
	Property	0 – 15%	6%
	Defensive assets		24%
	Unlisted assets
	– Infrastructure	0 – 5%	3%
	– Alternatives	0 – 10%	5%
	Property	0 – 15%	9%
	Australian fixed interest	0 – 20%	3.5%
	International fixed interest	0 – 20%	3.5%
	Cash	0 – 10%	0%
Past performance	Net fund earning rate to 30 June p.a.
	2011	10.1%
	2010	8.1%
	2009	-13.1%
	2008	-3.6%
	2007	16.8%
	Compound average to 30 June 2011 p.a.
	3 year	1.1%
	5 year	3.1%
	10 year	6.1%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year.

HOSTPLUS Executive was introduced in 2005, and uses the same investments as HOSTPLUS. We use the data from HOSTPLUS for the 10 year investment performance.

Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Shares Plus
Investment objectives and strategies	Achieve high, long-term returns that exceed the return of the Balanced option over rolling five year periods and acknowledging the chance of significant fluctuations in returns. Invest in long-term growth assets, accepting the prospect of negative returns is increased. Achieve returns that are above the average return of other similar funds.
Risk/return profile	High investment risk. Likelihood of a negative annual return in any one year: one in every three to four years.
Investment style	Pre-mixed option. Contains the highest investment in assets with potential for capital growth.
Who this option would suit	This Option is less diversified than the Fund’s Default Option and has a higher risk and return profile.  This Option may suit members who have a six year plus investment time horizon.
Minimum Investment Timeframe#	6 years +
Asset mix		Range	Benchmark
	Growth assets		85%
	Australian shares	30 – 50%	38%
	International shares	20 – 40%	34%
	Unlisted assets
	– Infrastructure	0 – 10%	3%
	– Private equity	0 – 15%	6%
	– Alternatives	0 – 10%	1%
	Property	0 – 10%	3%
	Defensive assets		15%
	Unlisted assets
	– Infrastructure	0 – 5%	1%
	– Alternatives	0 – 5%	3%
	Property	0 – 10%	5%
	Australian fixed interest	0 – 10%	3%
	International fixed interest	0 – 10%	3%
	Cash	0 – 10%	0%
Past performance	Net fund earning rate to 30 June p.a.
	2011	11.6%
	2010	9.3%
	2009	-14.5%
	2008	-5.4%
	2007	19.6%
	Compound average to 30 June 2011 p.a.
	3 year	1.4%
	5 year	3.4%
	10 year	5.8%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year.

HOSTPLUS Executive was introduced in 2005, and uses the same investments as HOSTPLUS. We use the data from HOSTPLUS for the 10 year investment performance.

Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Cash
Investment objectives and strategies	Maintain the invested capital. To provide positive returns.
Risk/return profile	Lowest risk with corresponding expectation of lower returns. Expectation of a positive return being achieved each year.
Investment style	Cash investments could include deposits in a bank, investments in short-term money markets and other similar investments.
Who this option would suit	This Option may suit members who have a short term investment horizon.  It will provide security of capital but returns will typically be lower than that produced by the Fund’s Default Option over the medium to long term.
Minimum Investment Timeframe#	Less than 1 year
Asset mix		Range	Benchmark
	Growth assets		0%
	Defensive assets		100%
	Cash	0 –100%	100%
Past performance	Net fund earning rate to 30 June p.a.
	2011	5.1%
	2010	3.8%
	2009	5.0%
	2008	6.6%
	2007	5.9%
	Compound average to 30 June 2011 p.a.
	3 year	4.6%
	5 year	5.3%
	10 year	5.0%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year.  

HOSTPLUS Executive was introduced in 2005, and uses the same investments as HOSTPLUS. We use the data from HOSTPLUS for the 10 year investment performance.

Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Diversified Fixed Interest
Investment objectives and strategies	Aim to provide a high level of capital protection and returns that over the medium term exceed those available from investing solely in cash type investments.
Risk/return profile	Moderate risk investment. Generally less volatile than property and shares over the short term, but also provides a lower level of return. Likelihood of a negative annual return in any one year: one in every six to seven years.
Investment style	Usually a loan to a Government or business with a fixed interest rate and the length of the loan agreed in advance.
Who this option would suit	This Option may suit members who desire lower volatility over the medium term.  Whilst returns can fluctuate, the risk and return profile is lower than the Fund’s Default and Shares Options.
Minimum Investment Timeframe#	5 years +
Asset mix		Range	Benchmark
	Growth assets		0%
	Alternatives	0%	0%
	Defensive assets		100%
	Australian and International fixed interest	90 – 100%	100%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	9.5%
	2010	9.0%
	2009	4.7%
	2008	5.8%
	2007	4.5%
	Compound average to 30 June 2011 p.a.
	3 year	7.7%
	5 year	6.7%
	10 year	6.5%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. 

HOSTPLUS Executive was introduced in 2005, and uses the same investments as HOSTPLUS. We use the data from HOSTPLUS for the 10 year investment performance.

Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Property
Investment objectives and strategies	To provide exposure to the rental income and capital growth arising from property and land assets.
Risk/return profile	Moderate to high risk investment. Corresponding moderate to high return. Likelihood of a negative annual return in any one year: one in every six to seven years.
Investment style	An investment in property or buildings, either directly or via property trusts.
Who this option would suit	This Option has a lower risk and return profile than the Fund’s Default Option and aims to achieve income returns and capital growth over the longer term.  This Option may suit members who have a five year plus investment time horizon.
Minimum Investment Timeframe#	5 years +
Asset mix		Range	Benchmark
	Growth assets		40%
	Property	0 – 100%	40%
	Defensive assets		60%
	Property	0 – 100%	60%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	4.9%
	2010	2.5%
	2009	-10.4%
	2008	9.7%
	2007	14.6%
	Compound average to 30 June 2011 p.a.
	3 year	-1.2%
	5 year	3.9%
	10 year	6.9%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. 

HOSTPLUS Executive was introduced in 2005, and uses the same investments as HOSTPLUS. We use the data from HOSTPLUS for the 10 year investment performance.

Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Australian Shares
Investment objectives and strategies	To provide exposure to predominantly Australian shares with the potential for a high level of growth over the long term. Outperform the S&P/ASX300 Accumulation Index over rolling three year periods.
Risk/return profile	High to very high risk investment. Corresponding high returns. Likelihood of a negative annual return in any one year: one in every two to three years.
Investment style	Active management.
Who this option would suit	This Option is less diversified than the Fund’s Default Option and has a higher risk and return profile.  This Option may suit members who have a seven year plus investment time horizon.
Minimum Investment Timeframe#	7 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	Australian shares	0 – 100%	100%
	International shares	0 – 10%	0%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	13.5%
	2010	13.3%
	2009	-10.7%
	2008	-10.2%
	2007	27.8%
	Compound average to 30 June 2011 p.a.
	3 year	4.7%
	5 year	5.7%
	10 year	9.6%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. 

HOSTPLUS Executive was introduced in 2005, and uses the same investments as HOSTPLUS. We use the data from HOSTPLUS for the 10 year investment performance.

Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

International Shares
Investment objectives and strategies	To provide exposure to international shares with the potential for a high level of growth over the long term. Outperform the MSCI World Accumulation Index (ex-Australia) over rolling three year periods.
Risk/return profile	High to very high risk investment. Corresponding high returns. A component of this investment is exposed to currency fluctuations. Likelihood of a negative annual return in any one year: one in every two to three years.
Investment style	Active management.
Who this option would suit	This Option is less diversified than the Fund’s Default Option and has a higher risk and return profile.  This Option may suit members who have a seven year plus investment time horizon.
Minimum Investment Timeframe#	7 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	International shares	0 – 100%	100%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	16.2%
	2010	8.5%
	2009	-22.0%
	2008	-11.6%
	2007	16.0%
	Compound average to 30 June 2011 p.a.
	3 year	-0.6%
	5 year	0.2%
	10 year	1.3%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year.

HOSTPLUS Executive was introduced in 2005, and uses the same investments as HOSTPLUS. We use the data from HOSTPLUS for the 10 year investment performance.

Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Macquarie Investment Management – Australian Fixed Interest
Investment objectives and strategies	Guarantee the return of the UBS Composite Bond Index (All Maturities). Underperformance of the index by the underlying portfolio is reimbursed by the manager. Any out-performance of the index is retained by the manager.
Risk/return profile	Low to medium risk investment. Likelihood of a negative annual return in any one year: one in every six to seven years.
Investment style	Passive management.
Who this option would suit	This Option may suit members who desire lower volatility over the medium term.  Whilst returns can fluctuate, the risk and return profile is lower than the Fund’s Default and Shares Options.
Minimum Investment Timeframe#	3 years +
Asset mix		Range	Benchmark
	Growth assets		0%
	Defensive assets		100%
	Australian fixed interest	–	100%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	4.7%
	2010	6.7%
	2009	9.4%
	2008	3.8%
	2007	3.4%
	Compound average to 30 June 2011 p.a.
	3 year	6.9%
	5 year	5.6%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

BlackRock Asset Management – International Fixed Interest
Investment objectives and strategies	Provide returns similar to the Citigroup World Government Bond Index (hedged in AUD with net dividends reinvested).
Risk/return profile	Low to medium risk investment. Likelihood of a negative annual return in any one year: one in every six to seven years.
Investment style	Passive management. The manager invests in securities that form the Citigroup World Government Bond Index, using an index tracking approach to manage securities.
Who this option would suit	This Option may suit members who desire lower volatility over the medium term.  Whilst returns can fluctuate, the risk and return profile is lower than the Fund’s Default and Shares Options.
Minimum Investment Timeframe#	3 years +
Asset mix		Range	Benchmark
	Growth assets		0%
	Defensive assets		100%
	International fixed interest	–	100%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	0.00%*
	2010	–
	2009	–
	2008	–
	2007	–
	Compound average to 30 June 2011 p.a.
	3 year	–
	5 year	–

*This option was introduced on 1 June 2011, therefore this performance figure is for the period of one month (1 June 2011 – 30 June 2011).

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Industry Super Property Trust Core Fund – Property
Investment objectives and strategies	Long term investment in a diversified pool of quality Australian office, retail and industrial properties. Provide returns superior to the Mercer/IPD Australian Pooled Property Fund Index.
Risk/return profile	Moderate to high risk investment. Corresponding moderate to high returns. Likelihood of a negative annual return in any one year: one in every six to seven years.
Investment style	The Fund has an income bias aiming to offer investors lower relative earnings volatility and a higher income yield.
Who this option would suit	This Option has a lower risk and return profile than the Fund’s Default Option and aims to achieve income returns and capital growth over the longer term.  This Option may suit members who have a five year plus investment time horizon.
Minimum Investment Timeframe#	5 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	Australian property		100%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	7.9%
	2010	6.0%
	2009	-13.7%
	2008	8.0%
	2007	16.2%
	Compound average to 30 June 2011 p.a.
	3 year	-0.5%
	5 year	4.3%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Lend Lease managed Australian Prime Property Funds (Retail, Commercial & Industrial) – Property
Investment objectives and strategies	Long-term investment in quality-diversified portfolios of retail, commercial and industrial properties in Australia. Provide returns superior to the Mercer/IPD Australian Pooled Property Fund Index.
Risk/return profile	Moderate to high risk investment. Corresponding moderate to high returns Likelihood of a negative annual return in any one year: one in every six to seven years.
Investment style	Long-term direct investment in a quality portfolio of major regional core retail assets, commercial assets and industrial assets across Australia.
Who this option would suit	This Option has a lower risk and return profile than the Fund’s Default Option and aims to achieve income returns and capital growth over the longer term.  This Option may suit members who have a five year plus investment time horizon.
Minimum Investment Timeframe#	5 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	Australian property	–	100%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	7.9%
	2010	0.2%
	2009	-10.1%
	2008	12.2%
	2007	17.4%
	Compound average to 30 June 2011 p.a.
	3 year	-1.0%
	5 year	5.1%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Balanced Equity Management – Australian Shares
Investment objectives and strategies	To outperform the S&P/ASX100 Accumulation Index over rolling three year periods.
Risk/return profile	High to very high risk investment. Corresponding high returns. Likelihood of a negative annual return in any one year: one in every two to three years.
Investment style	Active management style based on fundamental analysis of stocks within the S&P/ASX100 Accumulation Index.
Who this option would suit	This Option is less diversified than the Fund’s Default Option and has a higher risk and return profile.  This Option may suit members who have a seven year plus investment time horizon.
Minimum Investment Timeframe#	7 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	Australian shares	–	100%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	12.6%
	2010	14.3%
	2009	-10.9%
	2008	-13.4%
	2007	26.1%
	Compound average to 30 June 2011 p.a.
	3 year	4.6%
	5 year	4.6%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Macquarie Investment Management – Australian Shares
Investment objectives and strategies	Match the return of the S&P/ASX300 Accumulation Index.
Risk/return profile	High to very high risk investment. Corresponding high returns. Likelihood of a negative annual return in any one year: one in every two to three years.
Investment style	Enhanced passive management.
Who this option would suit	This Option is less diversified than the Fund’s Default Option and has a higher risk and return profile.  This Option may suit members who have a seven year plus investment time horizon.
Minimum Investment Timeframe#	7 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	Australian shares	–	100%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	10.9%
	2010	11.5%
	2009	-16.1%
	2008	-9.8%
	2007	27.4%
	Compound average to 30 June 2011 p.a.
	3 year	1.3%
	5 year	3.6%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Paradice Investment Management (Small Cap) – Australian Shares
Investment objectives and strategies	To exceed the S&P/ASX ex-100 Leaders Accumulation Index over rolling three year periods.
Risk/return profile	High to very high risk investment. Corresponding high returns. Likelihood of a negative annual return in any one year: one in every two to three years.
Investment style	Specialises in investing in companies outside the ASX top 100 stocks as defined by market capitalisation, as well as having the capacity to invest in New Zealand stocks.
Who this option would suit	This Option is less diversified than the Fund’s Default Option and has a higher risk and return profile.  This Option may suit members who have a seven year plus investment time horizon.
Minimum Investment Timeframe#	7 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	Australian/NZ shares	–	100%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	18.7%
	2010	24.6%
	2009	-15.8%
	2008	-20.8%
	2007	33.4%
	Compound average to 30 June 2011 p.a.
	3 year	7.6%
	5 year	5.6%

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

IronBridge Capital Management – International Shares
Investment objectives and strategies	Outperform the MSCI World (ex Australia) Index in Australian dollars over rolling three year periods.
Risk/return profile	High to very high risk investment. Corresponding high returns. Investment is fully exposed to currency fluctuations. Manager is permitted to invest a limited proportion of the portfolio in emerging countries. Likelihood of negative annual return in any one year: one in every three to four years.
Investment style	Active style blend of growth and value stock selection. Utilises proprietary concept “Life Cycle” which defines the path of analysis for fundamental research and for ensuring proper diversification in the portfolio construction process.
Who this option would suit	This Option is less diversified than the Fund’s Default Option and has a higher risk and return profile.  This Option may suit members who have a seven year plus investment time horizon.
Minimum Investment Timeframe#	7 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	International shares	–	100%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	-0.45%*
	2010	–
	2009	–
	2008	–
	2007	–
	Compound average to 30 June 2011 p.a.
	3 year	–
	5 year	–

*This option was introduced on 1 June 2011, therefore this performance figure is for the period of one month (1 June 2011 – 30 June 2011).

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Neuberger Berman – International Shares*
Investment objectives and strategies	Outperform the MSCI Emerging Market index by 3 – 5% over a full market cycle (typically 3 to 5 years).
Risk/return profile	High to very high risk investment. Corresponding high returns. Investment is fully exposed to currency fluctuations. Likelihood of negative annual return in any one year: one in every three to four years.
Investment style	Seeks to maximise performance through security selection, active country allocation and risk management. Constructs portfolios with high quality, growing companies trading at attractive valuations. The style can best be characterised by Growth at a Reasonable Price (GARP).
Who this option would suit	This Option is less diversified than the Fund’s Default Option and has a higher risk and return profile.  This Option may suit members who have a seven year plus investment time horizon.
Minimum Investment Timeframe#	7 years +
Asset mix		Range	Benchmark
	Growth assets		100%
	International shares	–	100%
	Defensive assets		0%
	Investment managers may invest a proportion of this option’s assets in cash for management purposes from time to time.
Past performance	Net fund earning rate to 30 June p.a.
	2011	–
	2010	–
	2009	–
	2008	–
	2007	–
	Compound average to 30 June 2011 p.a.
	3 year	–
	5 year	–

*This option was introduced on 31 October 2011.

#The Minimum Investment Timeframe is based on the risk and return profile of this option. The timeframe considers volatility and the likelihood of negative annual returns in any one year. Past performance is not a guide to future performance. All net fund earning rates are after fees and taxes.

Cash

ING Investment Management Ltd

JPMorgan Chase Bank, N.A.

Diversified fixed interest

Alternative Fixed Income Funds
– Industry Funds Management Pty Ltd

BlackRock Indexed World Government Bond Fund
– BlackRock Asset Management Australia Limited*

ING Investment Management Ltd

Macquarie True Index Australian Fixed Interest Fund
– Macquarie Investment Management Limited*

Super Loans Trust
– ME Portfolio Management Limited

Property

Australian Prime Property Funds (Retail, Commercial & Industrial)
– Lend Lease Investment Management *

Colonial First State Property Opportunistic Partnership
– Colonial First State Property Limited

Goodman Australia Industrial Fund
– Goodman Funds Management Australia Limited

Industry Superannuation Property Trust (Core Fund)
– ISPT Pty Ltd*

ISPT Development and Opportunities Fund I & II
– ISPT Pty Ltd

Lend Lease Asian Retail Investment Fund
– Lend Lease Investment Management

Lend Lease Communities Fund 1
– Lend Lease Investment Management

Lend Lease Real Estate Partners 3
– Lend Lease Investment Management

Lend Lease V5 Trust
– Lend Lease Development Pty Limited

Macquarie Real Estate Equity Fund 3, 5 & 6
– Macquarie Admin Services Pty Limited

MGPA Asia Fund III
– MGPA

Retirement Villages Group
– Macquarie Capital Advisers Limited

Select Property Portfolio No. 1, 2 & 3
– AMP Capital Investors Limited

Stockland Residential Estates Equity Fund No. 1
– Stockland Capital Partners Limited

Wholesale Property

Unlisted assets

Alternatives

Apostle Loomis Sayles Credit Opportunities Fund
– Loomis, Sayles & Company L.P.

Aurora Offshore Fund Ltd. II
– Aurora Investment Management L.L.C.

Babson Capital Management LLC

Bridgewater Pure Alpha Fund II, Ltd
– Bridgewater Associates, Inc

GMO Multi Strategy Trust
– GMO Australia Limited

Stone Tower Fund Management LLC

Infrastructure

Campus Living Villages Fund
– Campus Living Funds Management Limited

CFS Infrastructure Fund (Anglian Water Group Sector)
– Colonial First State Property Limited

IFM Infrastructure Funds - Australian and International Infrastructure
– Industry Funds Management Pty Ltd

Macquarie Global Infrastructure Fund III
– Macquarie Specialised Asset Management Limited

Utilities Trust of Australia
– Hastings Funds Management Limited

Private equity

Apostle Carnegie Private Opportunities Fund No.1
–  M.H. Carnegie & Co. Pty Limited

Carnegie Innovation Fund, LP
–  Carnegie Venture Capital Pty Limited

Crown Europe Middle Market II Plc
– LGT Capital Partners (Ireland) Limited

Crown European Buyout Opportunities II Plc
– LGT Capital Partners (Ireland) Limited

Industry Super Holdings Pty Ltd

IFM Private Equity Funds - Australian and International Private Equity Fund
– Industry Funds Management Pty Ltd

Members Equity Bank Pty Limited

Partners Group Secondary 2008, L.P.
– Partners Group Management Ltd

Partners Group Secondary 2011 (EUR), S.C.A., SICAR
– Partners Group Management Ltd

Superpartners Pty Ltd

Wilshire Private Markets Group – US, European, Asian and Australian Private Equity
– Wilshire Australia Pty Limited

Australian shares

Acadian Wholesale Australian Equity Long Short Fund
– Acadian Asset Management (Australia) Ltd

Balanced Equity Management Pty Limited*

BT Wholesale Australian Long/Short Fund
– BT Investment Management Limited

Goldman Sachs & Partners Australia Managed Funds Limited (Australian Equities)

Goldman Sachs & Partners Australia Managed Funds Limited (Emerging Leaders)

Greencape Capital Pty Ltd

Industry Funds Management Pty Ltd (Enhanced Indexed)

Industry Funds Management Pty Ltd (Strategic Australian Equities)

L1 Capital Pty Ltd

Macquarie Investment Management Ltd*

Orbis Investment Management (Australia) Pty Ltd

Paradice Investment Management Pty Ltd (Small Cap)*

Paradice Investment Management Pty Ltd (Mid Cap)

Paradice Investment Management Pty Ltd (Large Cap)

Vinva Australian Equity Alpha Extension Fund
– Vinva Investment Management Limited

International shares

Apostle Global Small-Mid Cap Fund
– Highclere International Investors Ltd
– Vaughan Nelson Investment Management, L.P.

Baillie Gifford Overseas Limited

BlackRock Fission Indexed International Equity Fund
– BlackRock Asset Management Australia Limited

Esemplia Emerging Markets

Goldman Sachs Hedged Global Long Short Fund
– Goldman Sachs & Partners Australia Managed Funds Limited

Independent Franchise Partners, LLP

IronBridge Capital Management, L.P.*

Northcape Capital Pty Ltd

Neuberger Berman Australia Pty Limited*

Orbis Institutional Global Equity Fund
– Orbis Investment Management Limited

Paradice Investment Management Pty Ltd (Global Small Cap)

Wholesale Pooled Fund Special Strategies Portfolio
– Wellington Management Company

Currency

Mesirow Financial Investment Management Inc.

* Managers available as individual manager investment options.