PSS Fund Performance for June 2007
Welcome to the monthly update on your Fund's investment performance.
ARIA’s primary responsibility is the management and investment of the PSS Fund in the equitable and best interests of all members. ARIA approaches this task by setting an investment objective to maximise the real returns earned on investments subject to a tolerable level of short-term volatility.
PSS Default Fund
Table 1: The PSS Default Fund Earning Rate as at end June 2007 (%)
PSS Default Fund earning Rate for 12 months to end June 2007 |
17.1*% |
* this is an unaudited 30 June value
Table 2: Historical Fund returns over the last five years (% p.a.)
| Year | Return |
2001-02 |
-5.7 |
2002-03 |
2.9 |
2003-04 |
14.2 |
2004-05 |
13.9 |
2005-06 |
13.1 |
All Earning Rates are after fees and tax
Month to date earning rate history
Commentary:
The 2006/07 financial year was the fourth successive year in which the Fund achieved a double digit return. The following chart shows the Fund’s real (i.e. after inflation) return over various time periods compared with its medium to long term real return target of 4.5% p.a. The strategic asset allocation of the Fund was altered in 2002, reducing the allocation to growth assets. This resulted in the Fund taking on the characteristics of a Balanced fund, rather than a Growth fund.
Over the year ending June, the Australian equity market rose by 29%, with the strongest gains achieved by stocks within the information technology sector (up 55%), telecommunication sector (up 40%) and industrials sector (up 40%). International equities in hedged terms rose by 21%, a result that again lagged the Australian market’s rise. The Australian property market also posted very positive returns (listed up 26%, unlisted up 19%), but bond markets (Australia up 4.0%, international up 5.9%) underperformed cash (up 6.4%) due to a rise in global bond yields.
PSS Cash Investment Option
Table 3: The PSS Cash Investment Option Fund Earning Rate as at end June 2007 (%)
PSS Cash Investment Option Fund earning Rate for 12 months to end June 2007 |
5.4*% |
* this is an unaudited 30 June value
Table 4: Historical Fund Earning Rates over the last five years (% p.a.)
| Year | Return |
2004-05 (7 months to June) |
2.8 |
2005-06 |
4.8 |
All Earning Rates are after fees and tax
Month to date earning rate history
Commentary:
The Cash Investment Option continues to deliver returns in line with the benchmark return, once account is taken of fees and taxes.
Alison Tarditi
CIO
12 July 2007
