Monthly investment performance update

PSSap Fund Performance for November 2005

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 November 2005 (% )

This table shows the actual asset allocations of the four pre-mixed investment options at the end of November 2005. The other seven options are essentially single strategy options - see our product disclosure statement .

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

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

Commentary:

In November, global equities rose by just over 4% in local currency terms, bringing the financial year-to-date return to just under 10%. In the US, the S&P 500 increased by 3.8%, reflecting continued growth in both the manufacturing and service sectors, a surge in third-quarter productivity, and a sharp rise in the Conference Board's Leading Index and Consumer Confidence Index. The equity market was also buoyed by improving job numbers and falling oil prices.

Outside the US, equity market performance was generally strong. Japan (+7.2%) was the stand-out performer, although good gains were also made by Pacific Basin ex Japan (+4.1%) and Europe (+3.6%). The Australian market also recorded an impressive rise of 4.4%. Emerging markets rose by 8.3% in US dollar terms, more than offsetting the decline experienced in October.

Bond markets steadied in November, with both global and Australian bonds marginally exceeding the return from cash. However, in the five months ending November, a rise in bond yields resulted in both global and Australian bonds underperforming cash.

The Fund's equity managers recorded performance that was below benchmark in the month of November, reflecting the defensive positioning of their portfolios in a month in which equity markets rose strongly. For the five months to the end of November, the Fund's international equity managers achieved performance in excess of benchmark, while the performance of the Fund's Australian equity managers was somewhat below benchmark.

Greg Burt
Portfolio Manager
16 January 2006