Update to buy-sell spread

Online update to Product Disclosure Statement (PDS)

From Tuesday 8 March 2011 a number of changes to the buy-sell spread came into effect.

What's changing

Only the buy-sell spreads for the following investment options have changed (some options have increased and some decreased):

  • Conservative (increased)
  • Balanced (increased)
  • Aggressive (decreased)
  • Government bonds (increased)
  • International shares (unhedged) (decreased)
  • International shares (decreased)

What is the buy-sell spread?

Buy-sell spread is the term used to describe the cost of entering or exiting an investment option. For example when you purchase units in a particular investment option the purchase is at the 'buy' price and similarly when you exit it is at the 'sell' price. This means the buy-sell spread reflects the difference in the buy and sell price.

This cost covers the transaction expenses that are necessary when we buy and sell fund assets (for example brokerage costs).

What does this mean for you?

When you make an investment switch, the buy-sell spread will be reflected in the number of units used to purchase your chosen investment option(s). That is, the value of your investment will be reduced by the buy or sell spread.

The buy-sell spread means that only members who are buying, switching investments or withdrawing bear the cost.

More detail and online update to the PSSap PDS

This table shows the buy and sell spreads for each investment option expressed as a percentage of a contribution amount (in the case of a buy spread) and a withdrawal amount (in the case of a sell spread). It also shows worked examples illustrating the cost of a buy spread or sell spread associated with a contribution or withdrawal of $5,000 in relation to each investment option. For an investment switch, both a buy and a sell spread will be applied.

This information also amends the product disclosure statement (PDS).

This table will replace table 15b on page 54. Only the buy-sell spread for Conservative, Balanced, Aggressive, Government bonds, International shares (unhedged) and International shares have changed. All other information remains the same.

Wednesday 9 March 2011