A common question we have been receiving recently is ‘where is the Diversified Fixed Interest option invested?’
And given the ongoing sovereign debt crisis in Europe, the next most frequently asked question is ‘what’s this option’s exposure to Europe and specific countries in Europe?’
Fixed interest (also referred to as fixed income) as an asset class includes investments in bonds and loans to government organisations and companies. Interest is payable, which generates income and the value of the underlying securities can also change, which can add to or detract from returns.
The Diversified Fixed Interest investment option has a medium term objective of generating an average annual return that outperforms CPI + 1 to 2%.
What does the Diversified Fixed interest option invest in?
The Diversified Fixed Interest option invests in a broad portfolio of Australian and International fixed interest assets. The fixed interest allocations of AustralianSuper’s PreMixed investment options, such as the Balanced option, invest in the same portfolio as the Diversified Fixed Interest option.
The table below shows how this portfolio was invested at 31 October 2011.
| Sector Configuration |
Allocation |
| Government and Semi Government |
38.1% |
| Investment Grade Corporate |
21.3% |
| Residential Mortgage Backed Securities (RMBS) |
7.4% |
| Asset backed securities (ABS) |
2.4% |
| Loans |
18.9% |
| High yield |
2.4% |
| Cash |
9.6% |
| TOTAL |
100.0% |
Which countries does the Diversified Fixed Interest option invest in?
The table below shows the geographic breakdown of the portfolio at the end of October 2011. Just under 40% of the total portfolio was invested internationally, with 6.75% invested in European countries. There was no exposure to Greece and the other four countries that are of most concern (Italy, Spain, Portugal and Ireland) comprised 1.49% of the portfolio.
Country exposures 31 October 2011
| USA |
19.62% |
South Africa |
0.37% |
| Japan |
4.78% |
New Zealand |
0.35% |
| UK |
2.22% |
Hungary |
0.32% |
| Germany |
1.56% |
Netherlands |
0.27% |
| Mexico |
1.16% |
Belgium |
0.26% |
| France |
1.00% |
Austria |
0.18% |
| Italy |
0.91% |
Denmark |
0.10% |
| Canada |
0.87% |
Sweden |
0.07% |
| Poland |
0.86% |
Portugal |
0.07% |
| Malaysia |
0.70% |
Finland |
0.07% |
| South Korea |
0.56% |
Ireland |
0.06% |
| Norway |
0.53% |
Switzerland |
0.05% |
| Spain |
0.45% |
Singapore |
0.04% |
| Brazil |
0.44% |
International |
38.28% |
| Indonesia |
0.40% |
Australia |
61.72% |
We would urge you to obtain advice from a licensed financial adviser before you choose an investment option or set the investment strategy for your super. A professional financial adviser can provide you with personalised advice that takes into account your personal circumstances, goals, investment timeframe and tolerance for risk. Our Financial Education and Advice Team can help you decide which AustralianSuper investment option or options are right for you. There is no charge for this service. You can contact the Financial Education and Advice Team on 1300 300 273.
This document was prepared in December 2011 by AustralianSuper Pty Ltd ABN 94 006 457 987 AFSL 233788 the Trustee of AustralianSuper ABN 65 714 394 898. This document is of a general nature and does not take into account your personal objectives, situation or needs. Before making a decision about AustralianSuper, consider your financial requirements and read our Product Disclosure Statement, available at www.australiansuper.com/FormsPublications or by calling 1300 300 273. Investment returns are not guaranteed as all investments carry some risk. Past performance gives no indication of future returns.