Monthly investment performance update
Fund Performance for September 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 September 2005 (% )
This table shows the actual asset allocations of the four pre-mixed investment options at the end of September 2005. The other seven options are essentially single strategy options - see our product disclosure statement .
Asset Class |
Conservative |
Balanced 50/50 |
Trustee Choice |
Aggressive |
Cash |
35 |
12 |
12 |
2 |
Bonds/Fixed interest |
35 |
28 |
8 |
0 |
Market neutral strategies |
0 |
10 |
10 |
8 |
Total Defensive Assets |
70 |
50 |
30 |
10 |
Australian shares |
15 |
17 |
29 |
39 |
International shares |
12 |
18 |
26 |
36 |
Property |
3 |
10 |
10 |
10 |
Long/Short equities |
0 |
5 |
5 |
5 |
Total Growth Assets |
30 |
50 |
70 |
90 |
Total |
100 |
100 |
100 |
100 |
Table 2: Performance in 2005-06 as at end September 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.
Investment Option |
July |
August |
September |
Financial Year to End-September |
Conservative |
0.8 |
0.7 |
1.3 |
2.8 |
Balanced (50/50) |
1.2 |
0.7 |
1.8 |
3.8 |
Trustee Choice |
2.3 |
1.2 |
1.2 |
6.3 |
Aggressive |
2.4 |
0.7 |
3.7 |
6.9 |
Cash |
0.4 |
0.4 |
0.4 |
1.1 |
Bonds/Fixed interest |
-0.1 |
0.7 |
-0.2 |
0.5 |
Australian shares |
2.5 |
1.9 |
5.0 |
9.6 |
International shares (unhedged) |
3.5 |
1.0 |
1.4 |
5.9 |
International shares (hedged) |
3.4 |
-0.2 |
3.5 |
6.9 |
Property |
0.4 |
-0.1 |
0.8 |
1.1 |
Sustainable |
-0.1 |
-0.1 |
4.1 |
4.0 |
Commentary:
Equity markets outside the US continued to rise strongly in the month of September, reflecting continued buoyant investor sentiment and improving prospects for economic growth in Europe and Asia . In the US , equity markets were constrained by concerns over the growth outlook resulting from hurricane damage to the Gulf Coast , higher energy prices and expectations of further increases in short-term interest rates. The Australian equity market again rose strongly in September, culminating in a double-digit rise for the September quarter.
Fixed interest markets weakened again in September, reversing the bounce back evident in August. The September weakness reflected a growing realisation that long-term bond yields were too low for an environment in which US short-term interest rates are expected to continue to rise for some months yet. Consequently, while fixed interest returns in the September quarter were positive, they were well below that of cash.
Although the Fund's equity managers achieved strong absolute performance in the September quarter, returns were below benchmark, reflecting the defensive positioning of portfolios. The Fund's market neutral managers delivered strong returns in the first three months of the year with returns around 1.5% ahead of benchmark over this period.
Greg Burt
Portfolio Manager
3 November 2005
