Fund Performance for April 2006

Welcome to the monthly update on your Fund's investment portfolios.

The PSS Board's primary responsibility is the management and investment of the Fund in the equitable and best interests of all members. The Board approaches this task by setting investment objectives for the Fund's investment options that maximise the real investment returns earned subject to tolerable levels of short-term volatility for each option.

Table 1: Asset allocations for pre-mixed investment options as at end April 2006 (% )

This table shows the actual asset allocations of the four pre-mixed investment options at the end of April 2006. The other seven options are essentially single strategy options - see our product disclosure statement .

Asset Class	Conservative	Balanced 50/50	Trustee Choice	Aggressive
Cash	32	12	7	2
Bonds/Fixed interest	37	28	12	0
Market neutral strategies	0	10	10	8
Total Defensive Assets	69	50	29	10
Australian shares	16	18	30	39
International shares	12	17	26	36
Property	3	10	10	10
Long/Short equities	0	5	5	5
Total Growth Assets	31	50	71	90
Total	100	100	100	100

Table 2: Performance in 2005-06 as at end April 2006 (%)

The figures in the table are after fees and taxes and show the return for a member who was invested for the whole month in each option.

Investment Option	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	Financial Year to End-Apr
Conservative	0.8	0.7	1.3	-0.5	1.5	1.1	1.0	0.5	1.3	0.2	8.1
Balanced (50/50)	1.2	0.7	1.8	-0.5	1.9	1.3	1.6	0.5	1.6	0.4	11.1
Trustee Choice	2.3	1.2	2.7	-1.1	2.7	1.6	2.4	0.4	2.2	0.7	16.0
Aggressive	2.4	0.7	3.7	-1.9	3.6	1.9	3.0	0.2	2.8	1.0	18.7
Cash	0.4	0.4	0.4	0.4	0.4	0.4	0.4	0.3	0.4	0.3	3.8
Bonds/Fixed interest	-0.1	0.7	-0.2	-0.1	0.4	0.8	-0.2	0.9	0.4	-0.7	1.9
Australian shares	2.5	1.9	5.0	-3.3	4.3	2.5	3.7	0.2	4.5	2.2	25.9
International shares (unhedged)	3.5	1.0	1.4	-0.3	4.3	3.3	1.7	1.4	5.5	-2.3	21.0
International shares (hedged)	3.4	-0.2	3.5	-1.6	4.3	2.5	3.5	0.4	2.4	0.9	20.8
Property	0.4	-0.1	0.8	2.1	1.0	0.5	2.2	0.5	1.4	0.9	10.1
Sustainable	-0.1	-0.1	4.1	-3.1	3.3	2.3	3.8	1.5	4.6	1.8	19.6

Commentary:

The Australian share market rally continued in April, with the market rising by 2.6% due to a further very strong rise in commodity prices. International equity markets rose modestly in April, with market movements constrained by a significant rise in global bond yields. The MSCI (ex Aust) Index rose by 0.9% in hedged terms, but declined by 3.3% in unhedged terms, due to a large rise in the value of the Australian Dollar.

In the ten months to the end of April, the Australian share market rose by a very strong 27.6%, buoyed by a 57% rise in materials stocks. During the same period, the MSCI (ex Aust) Index rose by 19.7% in hedged terms and 21.5% in unhedged terms, thereby highlighting a modest decline in the value of the Australian Dollar. In terms of individual countries, Japan rose by 46%, Germany by 31%, the UK by 18% and the US by a comparatively modest 10%.

Economic releases during April continued to paint a picture of robust growth in the US, Japan and Europe. With strong, synchronised growth, it was no surprise to see global bond yields rise further and result in another decline in fixed interest markets. In the ten months to the end of April, cash (up by 4.8%) easily exceeded the returns from both Australian bonds (up 2.8%) and international bonds (up by just 0.8%).

Absolute performance of the four pre-mixed options in the ten months to April was strong, with the largest gains achieved by the options with the greatest exposure to equities. The return from Bonds / Fixed Interest, while low, was well within the expected range of outcomes for this option. Asset class performance relative to benchmark in the ten months to the end of April was strong in international equities and property, but less successful in alternative investments within Australian equities.

Andre Morony
Chief Investment Officer
7 June 2006