Glossary

Absolute return fund

A fund which aims to deliver returns that are above zero in a variety of market environments. Movements in share and bond markets have minimal impact on returns. This does not mean that absolute return funds will never have a negative return, as there are still risks involved. They’re also known as hedge funds.

Absolute return investment

An investment providing diversification benefits due to a low correlation with traditional asset classes, and as such, expected returns are stated in absolute terms and not relative to traditional benchmarks.

Accident

When referring to AustralianSuper insurance, accident means: bodily injury caused solely and directly by accidental, external and visible means, independent of any other cause.

Accumulation fund

Also called a defined contribution fund or allocated fund. It is a fund in which the benefit a member receives is the total of their contributions plus interest earned on those contributions, minus expenses and tax.

Active employment

When referring to AustralianSuper insurance, active employment means: a member is not restricted by injury, accident or illness from being capable of performing their full and normal duties on a full-time basis (for at least 30 hours per week) even though actual employment can be on a full-time, part-time or casual basis.

Active style management

An investment management style where the managers use their skills in selecting and trading a portfolio of shares or bonds, seeking better performance than the index against which they are measured. Managers will vary their strategy depending on current market conditions. The investments are reviewed on a regular basis so that the manager is in a position to benefit from movements in the market or from growth in individual assets. There are two major components of active management: asset allocation and stock selection. Compare with: passive style management

Adjusted taxable income

Adjusted taxable income for superannuation surcharge tax purposes is calculated as: taxable income plus reportable fringe benefits plus surchargeable contributions (if applicable) minus lump-sum payments for unused long-service leave and annual leave received through bona fide redundancy, invalidity or under an approved early retirement scheme minus electronic transfer payments (ETPs)from a non-employer source included in your taxable income.

Administration fee

The fee charged by a fund against a member's account to cover administration costs. Most industry funds charge a flat fee for employer-sponsored members expressed as an amount per week.

After-tax money

An amount (usually income) after taxes have been subtracted.

All Industrials Index

The All Industrials includes all the non-resource stocks on the ASX. The index is dominated by the big four banks, BHP and Telstra.