ElectricSuper seeks to deliver strong investment performance to maximise the retirement benefits of ElectricSuper’s members, within the stated risk tolerance framework for each available investment option.
ElectricSuper’s investment approach is driven by the following investment beliefs:
Diversification of investments within the portfolio, including lowly correlated assets, will deliver more stable and reliable outcomes. Global diversification will enhance long term performance.
Investments are made and assessed with along-term focus. A long-term horizon allows tolerance for illiquid assets that can deliver superior returns.
Active management of investments can deliver superior returns (after fees) and improved risk management.
Short to medium term tactical positions in asset allocation away from the long-term strategic asset allocation as investment conditions fluctuate, can add to positive relative performance.These positions will consider individual market sector valuations and macro risks.
The primary risk of EISS is not achieving its investment objectives over stated time frames. The EISS aims to lower volatility while maintaining an exposure to growth assets.Ongoing monitoring of investment managers is important.
It is the after fee and tax investment return to the EISS that is important. Fees should represent value for members’ but this does not always mean the cheapest investment management option is best.
Liquidity of investments in the context of member benefit profiles needs to be carefully monitored and managed.
Investment scale is important to ensure investment management fees are as low as possible relative to funds invested and to enable ElectricSuper to access a full suite of investment opportunities.
Use of Gearing and Derivatives
The use of gearing and derivatives by fund managers, to increase long term returns, is acceptable provided managers act in accordance with their stated Risk Management Statement and Strategy.
Sound Environment, Social or Governance (ESG) practices lead to better investment outcomes.
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