Investment Guide. rest.com.au Effective 1 October 2015

Transcription

1 Investment Guide Effective 1 October 2015 The information in this document forms part of the Product Disclosure Statement (PDS) for REST Super, REST Corporate, REST Select and Acumen effective 1 October You should read the PDS in conjunction with this and other important information that forms part of the PDS. Issued by Retail Employees Superannuation Pty Limited ABN AFSL Retail Employees Superannuation Trust ABN rest.com.au

2 Contents Why investment choice matters 3 How you choose to invest now can make a real difference to your retirement Risks of super investment risk 4 Learn how investment risk can affect your super decisions How we invest your money 5 Take a look at the different asset classes and REST s active management Making your investment choice 8 REST s flexible investment options, competitive fees and quality support can help you make the right investment choice Investment options 9 Review how each REST investment option is managed, its risks and objectives Fees and costs 14 The costs for managing your investment What you need to know about REST investments 15 Want to know more about REST investments? Find your answers here Investment managers 18 The people looking after REST s investments Terms explained 19 A glossary of investment terms Investment Guide is incorporated by reference material which forms part of the REST Super Product Disclosure Statement (PDS), REST Corporate Product Disclosure Statement (PDS), REST Select Product Disclosure Statement (PDS) and Acumen Product Disclosure Statement (PDS) effective 1 October The relevant Member Guide, Insurance Guide including if applicable Additional information on insurance and this Investment Guide contain important information you should consider before making a decision to invest in REST Super, REST Corporate, REST Select or Acumen. The information in this document is general information only and doesn t take into account your individual objectives, financial situation or needs. Accordingly, before acting on the contents of the relevant PDS, you should consider whether it is appropriate to you, having regards to your objectives, financial situation and needs. You should read the relevant PDS including the relevant Member Guide, Insurance Guide and if applicable Additional information on insurance and this Investment Guide in its entirety before making any decision in connection with these products. You may wish to consult a licensed financial adviser to obtain financial advice that is tailored to suit your personal circumstances. If you are printing an electronic copy of the relevant PDS, you must print all pages of the relevant PDS and forms, this Investment Guide, and the other important information that forms part of the PDS. For an electronic copy, please visit rest.com.au and click on Forms & Publications to access the relevant PDS. REST Super, REST Corporate, REST Select and Acumen are governed by a trust deed. As a member you will be bound by the terms of the trust deed and its rules, which may be amended, subject to superannuation law. The trust deed and rules provide for many of the rights, duties and responsibilities of the Trustee, members, other beneficiaries and employers. There is currently some uncertainty about the terms of the trust deed for the Fund. The Trustee is seeking to confirm the terms of the trust deed in the Supreme Court of South Australia. This might mean that the terms of the trust deed will change. The Trustee does not think that any changes or the court proceedings will have any practical effect on members or on our administration of the Fund. The information contained in the relevant PDS is up to date at the time of preparation. However, the Trustee reserves the right to change the insurer and vary the benefits, insurance costs, procedures or terms and conditions from time to time. Some of the information may also be subject to change, such as information about fees and other costs, or the investment strategy or asset allocations of a particular investment option. From time to time there may be changes to non-materially adverse information which may be updated through member communications other than the PDS, or on our website at rest.com.au/governance Further information including a full paper copy of the relevant PDS, the trust deed, any non-materially adverse updates to information in the relevant PDS and any other important information that forms part of the relevant PDS can be obtained free of charge on request by contacting REST Customer Service: Phone: (8am to 8pm) Web: rest.com.au Mail: PO Box 350, Parramatta, NSW 2124 The above-mentioned PDSs have been issued by the Trustee company, Retail Employees Superannuation Pty Limited, Australian Business Number (ABN) , Australian Financial Services Licence (AFSL) , referred to in the PDS as the Trustee, we, our, us or REST. REST Super, REST Corporate, REST Select and Acumen are products of the Retail Employees Superannuation Trust ABN (The Fund). The Trustee s registered address is Level 7, 50 Carrington Street, Sydney NSW 2000, postal address: PO Box 350, Parramatta NSW The Trustee maintains professional indemnity insurance. REST is administered by Australian Administration Services Pty Ltd, ABN (AAS), referred to in the PDS as REST Customer Service. REST Customer Service personnel are not representatives of the Trustee. Any general financial product advice given by REST Customer Service personnel is provided by AAS. The invitation to invest in this product is only available to persons receiving this product in Australia. It is not made, directly or indirectly, to persons in any other country. REST Super Unique Superannuation Identifier RES0103AU REST Select Unique Superannuation Identifier RES0101AU REST Corporate Unique Superannuation Identifier RES0103AU Acumen Unique Superannuation Identifier RES0104AU REST Super and REST Corporate s MySuper Product Unique Identifier is

3 Why investment choice matters REST is an award winning industry super fund, with more than $37 billion in funds under management*. With competitive long-term investment returns, we re committed to improving the retirement outcomes of everyday Australians. Your super is one of the largest sums of money you ll have to manage. How you choose to invest it now can make a real difference to your retirement in the future, so it s important you understand the basics of investing. This guide is designed to give you information to help you make an informed investment choice for your super. By understanding the different asset classes, the risks of investing, and the investment options available to you, you can choose the strategy that you re comfortable with. And, it s just as important that you understand the kind of investor you are how you feel about risk, your time horizon and your retirement goals. These factors can change over time, so it can be a good idea to review your investment strategy regularly. At REST, we understand that members have different needs and financial objectives. We offer 13 easy to understand investment options, each with a differing level of risk and potential return. You can choose either one or a mix of structured investment options, or create your own portfolio from a range of asset pools. If you are a member of REST Super or REST Corporate and you don t want to make a choice, or just need time to think about your options, we will invest your savings in REST s Core Strategy (the MySuper investment option for REST Super and REST Corporate). If you are a member of REST Select or Acumen, you must choose an investment option as there is no default option in these products. Competitive long-term returns REST s Core Strategy option has outperformed similar options of other participating super funds surveyed over the last 5, 7 and 10 years. # For June 2015, REST s Core Strategy ranked 6th, 1st and 1st across 5, 7 and 10 years respectively. You don t have to make a decision alone Super can be complex. When you consider your super is one of the biggest investments you ll make, it makes sense to get good advice. REST can put you in touch with Money Solutions^ a team of financial coaches who can help you compare and evaluate your investment options. You can obtain personal financial advice over the phone and in person. Importantly, REST does not pay commissions to Money Solutions. Subject to superannuation laws, REST will pay for your first single superannuation question with a Money Solutions coach to get you started. If you have further questions about your super or other financial matters, or you need a full financial plan, Money Solutions will advise you of the fees before you decide to proceed. Visit rest.com.au to learn more about the Money Solutions services available to REST members or call REST Customer Service on * As at 30 June For more information about the awards won by REST, please go to rest.com.au/ourawards ^ Money Solutions Pty Limited ABN AFSL No Money Solutions personnel are not representatives of the Trustee. Any financial product advice given by Money Solutions is provided under the Money Solutions AFSL. The Trustee does not accept liability for any loss or damage incurred by any person as a result of using products or services provided by Money Solutions # SuperRatings Fund Crediting Survey SR 50 Balanced (60-76) Index, June Ratings, awards or investment returns are only one factor that you should consider when deciding how to invest your super. Past performance is not an indicator of future performance. Investment Guide 3

4 Risks of super investment risk All investments have some level of risk. Super funds generally invest in a range of asset classes for example, cash, bonds, property and shares that have different levels of risk. The likely investment return, and the risk of a negative return, is different for each investment option depending on the underlying mix of assets in the relevant investment option. Assets with the highest potential return over the longer term (such as shares), generally also have the highest risk of negative returns over the short-term. REST offers a number of different investment options with different levels of risk. Risk and return Risk is typically measured by how much investment returns are likely to vary up and down in a given period. Return comprises any income an investment earns, and any increase (or decrease) in the capital value of the investment. Your total return can be positive or negative. You accept the rewards but also the risk of your investment choice. What is the Standard Risk Measure? The Standard Risk Measure is a guide as to the likely number of negative annual returns expected over any 20 year period. The purpose of the Standard Risk Measure is to provide members with a guide to comparing investment options both within and across various superannuation funds. The tables on pages 10 to 13 provide the Standard Risk Measure for each investment option offered by REST. Commonly, the higher the volatility, the riskier the option. That s why, over the long run, your timeframe is perhaps the most critical component in planning your investments. Members need to ensure they are comfortable with the risks and potential losses associated with their chosen investment options. The estimates provided by REST for our various investment options are calculated using a number of assumptions about how investment markets are forecast to perform, how much fluctuation in returns there is likely to be and how different asset classes are related. These assumptions are not guaranteed and may change from time to time. A detailed explanation of the methodology and approach used is available on our website at rest.com.au/srm The standard risk measures are produced in accordance with the Standard Risk Measure guidance issued jointly by The Association of Superannuation Funds of Australia Limited and Financial Services Council in July What is the Standard Risk Measure telling us? The Standard Risk Measure calculates risk in terms of the likelihood of achieving a negative return in any one year ie it describes expected volatility in investment markets which is actually just one way that you could think about risk. There s no such thing as not taking any investment risk. The type and degree of risk will vary depending on the investments you choose. Every investment holds some level of risk. Only you know how much risk you re comfortable with. What s important is that you find the right balance of risk and reward to help you meet your long-term goals, regardless of what happens in the short-term. Your risk tolerance depends on several factors, including your age, when you ll need your money, your financial needs and your assets. The risk measure helps highlight the probability of the number of negative annual returns over a 20 year period. The expected chance of loss is on a before tax basis not taking into account imputation credits, and is before administration fees, but after taking account of investment management fees. The Standard Risk Measure is not a complete assessment of all forms of investment risk. For example it will not predict when market declines will happen, or, how long a decline will last. Importantly, it does not detail what the size of a negative return could be or take into account the potential for a positive return to be less than you may require to meet your investment objectives. What are some different ways of thinking about risk? Many people define risk as the volatility of the markets, especially in the short run. That s why, over the long run, your timeframe is perhaps the most critical component in planning your investments. A more complete measure of risk might be the risk that you do not save enough and invest appropriately during your working life to achieve the level of retirement income that you aspire to. One big risk most investors face is that their purchasing power will be eroded by rising prices due to inflation. Playing it safe and accepting lower market volatility also generally means accepting the potential for lower returns a risky strategy if you are trying to keep up with or beat inflation. Good advice from an experienced, well informed financial adviser can help you better understand the risks and potential losses associated with your chosen investment option. Risk and your investment time horizon Your investment horizon, or the period of time that you intend to keep your investment, can affect the way you think about investment risk. If you are investing for a retirement that is 25 or 30 years away, you typically have more time to ride out the ups and downs of the market. Diversifying across a range of asset sectors, industries and securities can reduce your risk and improve your investment outcomes. What if your timeframe is shorter? If you re close to retirement, you may not have the time to ride out a downturn. Your tolerance for volatile returns may be lower and you may want to consider investments that historically produce smoother returns from year to year. However, even after you retire, you may still want to keep some of your assets in growth-oriented investments after all, you may be retired for 10, 20 years or more. 4

5 Managing risk with diversification Diversification, or spreading your money across a number of investments, can mean that you don t have to rely on the performance of any one investment, so if one falls in value, another may perform well to make up for the loss. There are many ways to diversify your investments through REST Type of diversification Example Accessed in the REST range through Across asset classes Within asset classes Across different countries Across investment managers A mix of asset classes, such as shares and bonds For shares, a mix of companies in different industries A mix of countries and geographical regions with various economic conditions A mix of investment managers, each one having a different approach to investing and outlook on future market movements Core Strategy, Structured options All REST investment options Core Strategy, Structured options, Overseas Shares option, Shares option, Bond option, Australian Shares option All REST investment options except Basic Cash How we invest your money We invest your money across different investment markets using a range of asset classes and investment strategies to meet the investment objectives of your investment option. Investing in different investment markets, asset classes and strategies require different expertise. Therefore, we appoint professional investment managers who specialise in the relevant areas. Most of these managers are set a performance objective or an asset class benchmark to meet or exceed whilst working within the risk guidelines we set. We regularly monitor and review the performance of each investment manager, and we may add or remove managers as appropriate. Within each asset class, REST, or the appointed investment managers, may implement particular investment strategies to enhance returns or reduce risk relative to the multitude of potential investments, as defined by the benchmark of that asset class. For example, within the overseas shares asset class, we may invest in small capitalisation or emerging market shares that are not included in the benchmark for that asset class the MSCI All Country World ex-australia Index. Similarly, we may seek to reduce market risk within a particular asset class, for example, by excluding certain types of investments from our investment portfolio, by purchasing options or using other derivative instruments. Understanding asset classes Most assets fall into two broad groups defensive assets and growth assets so called because of their different risk and return characteristics. The descriptions of the asset classes below may not cover all the types of investments which are included in REST s asset classes. Defensive assets Defensive assets aim to protect your investment s value. They are lower risk investments, which means the chances of a negative return are lower than other asset types. They usually provide lower returns that may not outpace inflation in the long-term. REST s defensive assets include Cash, Bonds and Defensive Alternatives. Cash A portfolio of securities with a low level of interest rate risk. Includes securities which either have, on average, a short-term to maturity (12 months or less), for example, bank deposits, bank bills and commercial paper; or securities which have a floating interest rate that resets over short-term periods (12 months or less), for example, residential mortgage backed securities. Bonds A mixture of Australian and overseas debt securities issued by governments, semi-government authorities and companies. Bonds typically have a fixed coupon paid on a regular basis and are exposed to both interest rate risk (the impact that changing interest rates have on bond values) and default risk. Defensive Alternatives Consist of alternative assets with defensive characteristics which include absolute return investments. They may comprise a broad mix of strategies across global financial markets which offer diversification characteristics. Growth assets Growth assets aim to increase your investment returns. They have historically produced higher returns over the long-term. However, higher returns come with an increased risk that your investments could provide a negative return over a shorter timeframe. REST s growth assets include Australian Shares, Overseas Shares, Property, Infrastructure and Growth Alternatives. Investment Guide 5

6 How we invest your money (continued) Property Includes retail (shops and shopping centres), industrial (factories and warehouses), commercial (office buildings), retirement villages and student accommodation. Property investments provide rental income and can rise and fall in value over time. Shares Represent part-ownership in a company. Shares generally provide returns in the form of dividends and, in the longer term, in the form of capital gains, but capital losses (negative returns) are also possible. Different categories of shares include: Australian shares investments in companies listed on the Australian Securities Exchange. Overseas shares investments in companies operating overseas listed on foreign exchanges. Infrastructure Mainly involves holdings (directly or through other funds) in transport and utility assets, including airports, toll roads, shipping ports, electricity and gas generation and distribution assets. Growth Alternatives Consists of alternative assets with growth characteristics which include equity strategies, growth opportunities and agricultural investments. Equity strategies invest in equity-based investments, including unlisted private equity investments and long/short strategies. Growth opportunities invest in a range of investments potentially spanning all investment markets and employing a broad mix of investment strategies. Agricultural investments invest in agricultural holdings such as farms. How the asset classes perform Each asset class has its own level of risk and return. Typically, the greater an investment s risk, the greater its potential return over the long-term and vice versa the lower the risk, the lower the potential return over the long-term. Risk, or volatility, is the likelihood of variations in the level of returns over a given period, including the likelihood of negative returns. When you take on a higher risk, there is a greater chance that the value of your investments will fluctuate more over the short-term. The graph on the next page shows that shares have ups and downs from year to year, indicating they are more volatile and carry a higher level of risk. However, over the long-term, these asset classes have also produced higher returns than bonds and cash. Alternatively, leaving your super invested in less volatile assets that carry a lower level of risk, such as cash and bonds, may be the safest option in the short-term, but over the long-term they may not provide a sufficient investment return for you to meet your retirement income goal. 6

7 Asset class performance since 1985 How $10,000 invested in each asset class from 1 July 1985 would have grown over 30 years. Regarding this graph, please note that: returns are not guaranteed and are current to 30 June 2015 past performance is not an indication of future performance negative returns are possible over any given period returns shown are based on market indices returns quoted are before tax and fees (unless otherwise specified). The index returns in the graph are derived from the following indices: Australian shares Overseas shares Cash Bonds Direct property Australian shares S&P/ASX 300 Accumulation Index Overseas shares MSCI Daily Total Return Net World Index ex Australia in A$ Property Mercer Unlisted Property Index Bonds Bloomberg AusBond Composite 0+ Yr Index (all maturities) and Citigroup World Government Bond Index (hedged) Cash Bloomberg AusBond Bank Bill Index Investment Guide 7

8 Making your investment choice Your investment choices Growth Overseas Shares Shares Australian Shares Diversified High Growth Asset Type Cash Plus Capital Stable Balanced Core Strategy Property Bond Cash Defensive Basic Cash Lower risk Risk band and level Higher risk Your investment choices You may invest in a single option, or in a mix of the Core Strategy, Structured and Member-tailored options. You can also choose to invest your current savings one way and any future transactions a different way. Take the investor profile quiz online at rest.com.au or see a licensed financial adviser for a full assessment of your financial situation. Certain life events such as marriage, the birth of a child, receiving an inheritance or receiving a redundancy may be appropriate times to review your investments and possibly make a switch. Core Strategy The objective of the Core Strategy is to achieve a balance of risk and return by investing in both growth and defensive assets. Further details regarding the Core Strategy can be found on page 10. REST s Core Strategy is reviewed by the Trustee regularly and the asset allocation is actively managed to take account of current and expected market conditions. This means that we invest your money in various asset classes, such as cash, bonds, property, infrastructure, alternative investments and shares, and adjust the investment mix around the benchmark weighting within the ranges nominated. We also actively monitor the overall exposure to foreign currencies and may change the level of exposure as a result of changes in foreign currency markets. Structured options REST s Structured options are diversified across asset classes to match different member needs. We determine an appropriate asset allocation to enable each option to achieve its investment objective. Members may choose either one or a mix of the five structured options listed in the table on pages 10 and 11. These options are not actively managed that is, we will not normally change the asset allocation of the options in response to changing market circumstances. However, we reserve the right to vary the asset allocation in any of these options without prior notice or replace any option at our discretion. Member-tailored options REST s Member-tailored options invest in single asset classes for those who want to build their own customised portfolio. You can choose from one or more of the seven asset classes listed on pages 12 to 13. As you select the asset allocation, we do not undertake any active management of asset allocation. In order to create asset class diversity you would need to select a combination of multiple investment options. It is possible for a portfolio created in this way to have a very high degree of risk (ie high variability of returns) if, for example, you choose Shares alone. Features of REST s investment options Asset allocation pre-mixed across asset classes Core Strategy Yes Yes Structured options Yes No Member-tailored options No* Asset allocation actively managed No The Trustee sets and reviews asset weightings from time to time to take into account changing market conditions, but does not do this on an active basis. * Except the Shares option, which is pre-mixed across Australian and overseas shares. 8

9 Finding the right balance through asset allocation Asset allocation is the process of deciding how much money you want to invest in each asset class, commonly represented as a percentage (or weighting) of your total investment portfolio. The weightings you assign depend on the outcome you want to achieve. For example, if your goal is to maximise your investment returns over the long-term, you could consider investing the majority of your money in growth assets and the rest of your money in defensive assets. You can decide how involved you want to be with your asset allocation. You can either choose a pre-mixed asset allocation, or actively manage your own asset allocation. Choosing a pre-mixed asset allocation REST offers a number of pre-mixed investment options which have an allocation to a range of asset classes with various weightings which will be dependent upon the investment return objective and the time horizon for the investment option. REST s Core Strategy is reviewed by the Trustee at its regular meetings (currently 11 times per year) and the asset allocation is actively managed to take account of current market conditions. REST also has a number of pre-mixed Structured options for which the Trustee has determined the asset allocation and reviews the mix on at least an annual basis. The Trustee does not actively manage the asset allocation of these options in the same way it does for the Core Strategy. Creating your own portfolio You can create your own portfolio by choosing the percentages of one or more investment options. Your selected percentages must total 100%. Your money will stay in your selected investment option(s) until you switch it to another option(s). If you have elected to build your own portfolio, you may also need to consistently review and occasionally rebalance your investments to ensure they continue to reflect your preferred asset allocation. You can change your choice at any time REST realises your investment needs may change over time, so you have the option to change your investment choice at any time (switching). When making a switch you need to decide if you want to switch: your current account balance only the way future transactions are applied, or both. Your switch will become effective in accordance with the terms on How to switch an investment option on rest.com.au/investments Your switch will be confirmed in writing once processed. If you switch online, you will receive a printable confirmation. There is a separate buy and sell unit price for each option. When money is invested in an option it will generally use the buy price. When money is withdrawn from an option it will generally use the sell price. You can login to MemberAccess at rest.com.au to switch your investment options online. You will need your REST member number and password to login. If you don t have a password, you can register for one online. Alternatively, you can use the Application to make an investment choice form accompanying this guide. Keep up to date with your super and build your knowledge by signing up for enewsletters in MemberAccess at rest.com.au Investment options The following pages outline REST s investment options in detail. This information will help you compare the different investment options so you can make an informed investment choice that s right for you. Before you begin, it s important to read the following information. The returns on the following pages are quoted at 30 June each year after fees and taxes (not directly charged to your account) have been deducted, unless otherwise specified. The returns are current as at 30 June REST reserves the right to vary the asset allocations (including the benchmark and ranges) of all or any of these options, introduce new options and close existing options, without prior notice. The asset allocations for each investment option are available at rest.com.au/investments The investment return objectives quoted on pages 10 to 13 of this document are not guaranteed. Your investment in REST is not guaranteed. The value of your investment can rise or fall. The returns indicated for each investment option are based on the past performance of investment markets that may not be repeated in the future and are quoted to indicate the expected relative performances of the investment options over the long-term. Past performance is not an indication of future performance. You should consider obtaining financial advice before making an investment decision. Take our Investor Profile Quiz online at rest.com.au to find out what type of investor you are. Then, compare the different investment options and make a choice that is right for you. Investment Guide 9

10 Core Strategy Structured options Cash Plus Capital Stable Aim 1 Investment return objective 2 Asset allocation 3 Minimum suggested timeframe Standard risk measure 4 To achieve a balance of risk and return by investing in both growth assets and defensive assets. CPI + 3% pa over the long-term (rolling 10 year periods). 22% defensive, 78% growth, A mix of shares and bonds (both Australian and overseas), property, infrastructure, alternative assets and cash. Maintain the purchasing power of the funds invested by earning a slightly higher return on cash while minimising the risk of any capital loss. Outperform the Bloomberg AusBond Bank Bill Index over the short-term (rolling 2 year periods). 100% defensive Cash plus a small allocation to Defensive Alternatives. Cash consists of a portfolio of securities with a low level of interest rate risk (12 months or less), including bank deposits, bank bills, commercial paper and floating rate notes, for example, residential mortgage backed securities. 10+ years 2+ years 4+ years Estimated number of negative annual returns over any 20 year period, 3 to less than 4 Estimated number of negative annual returns over any 20 year period, less than 0.5 of a year A stable pattern of returns that at the same time maintains a low probability of a negative return in any 1 year. CPI + 1% pa over the medium-term (rolling 4 year periods). 62% defensive, 38% growth Mainly bonds (both Australian and overseas) and cash, with smaller proportions of shares (both Australian and overseas), property, infrastructure and alternative assets. Estimated number of negative annual returns over any 20 year period, 1 to less than 2 Risk band Risk band 5, Medium to High Risk band 1, Very Low Risk band 3, Low to Medium and level 5 What this option has returned 6 (Past performance is not an indication of future performance) % % % % % 29% 19% 6% 6% 11% Cash securities Bonds Defensive alternatives Growth alternatives Infrastructure Property Australian shares Overseas shares 6% 10% 13% 6% 6% 10% 13% (0-25%) (5-75%) (0-25%) (0-25%) 6% (0-15%) 11% (0-25%) 19% (15-45%) 29% (5-35%) 10.17% pa 7.82% pa % % % % % 10% 90% Cash securities Defensive alternatives 90% 10% 3.60% pa 3.97% pa 8% 5% 4% 9% Cash securities 32% Bonds 16% Defensive alternatives 14% Growth alternatives 9% Infrastructure 4% Property 5% Australian shares 8% Overseas shares 12% % % % % % 12% 14% 32% 16% 7.33% pa 6.11% pa Investment options with an exposure to the Australian shares asset class may include companies listed in Australia whose legal domicile is overseas. In addition, up to 10% of this asset class may be invested in stocks listed on the New Zealand Stock Exchange. The Core Strategy s returns are based on unit pricing from 1 January 2013 onwards. Prior to that a crediting rate was used. 1. Aim This is the goal or objective of the investment option. 2. Investment return objective This is what the Trustee uses to determine asset allocation. It is also used to measure if the investment objective is met. It is not a guaranteed rate of return. REST does not use the Return Target (shown in the Product Dashboard available at rest.com.au/dashboard) to set the investment return objective. 3. Asset allocation For the Core Strategy option, the asset allocation will vary year to year within the ranges shown in brackets. This also means the allocation to defensive assets and growth assets will vary from time to time. 10

11 Balanced Diversified High Growth A good balance of risk and return by investing in approximately equal proportions of growth assets and defensive assets. Strong returns over the longer term by investing in a diversified mix of assets weighted towards shares and other growth assets. Maximise returns over the long-term by investing predominantly in growth assets. CPI + 2% pa over the medium-term (rolling 6 year periods). CPI + 3% pa over the long-term (rolling 10 year periods). CPI + 4% pa over the very long-term (rolling 12 year periods). 43% defensive, 57% growth A mix of shares and bonds (both Australian and overseas), property, infrastructure, alternative assets and cash. 22% defensive, 78% growth Australian and overseas shares, property, infrastructure, alternative assets plus lesser amounts of bonds (both Australian and overseas) and cash. 7% defensive, 93% growth Australian and overseas shares, property, infrastructure and alternative assets. 14% 21% 7% 5% 10% 20% 13% 10% 30% 21% 6% 7% 9% 11% 7% 9% 38% 7% 12% 7% 10% Cash securities 20% Bonds 10% Defensive alternatives 13% Growth alternatives 10% Infrastructure 5% Property 7% Australian shares 14% Overseas shares 21% Cash securities 6% Bonds 7% Defensive alternatives 9% Growth alternatives 11% Infrastructure 7% Property 9% Australian shares 21% Overseas shares 30% 26% Defensive alternatives 7% Growth alternatives 12% Infrastructure 7% Property 10% Australian shares 26% Overseas shares 38% 6+ years 10+ years 12+ years Estimated number of negative annual returns over any 20 year period, 2 to less than 3 Estimated number of negative annual returns over any 20 year period, 3 to less than 4 Estimated number of negative annual returns over any 20 year period, 4 to less than 6 Risk band 4, Medium Risk band 5, Medium to High Risk Band 6, High % % % % % 8.79% pa 6.77% pa % % % % % 10.53% pa 7.62% pa % % % % % 11.61% pa 8.07% pa For all options other than the Core Strategy: The allocation to an individual asset class may vary by +/- 5% from the benchmark allocation shown, but not below 0% or more than 100% for an individual asset class; Where an option does not currently have a benchmark allocation to Cash, an allocation of up to 5% may be introduced; and The overall allocation to growth assets and defensive assets may vary by +/- 10% from the allocation shown. The Trustee reserves the right to vary the asset allocations, including the benchmarks and ranges, of all or any of the investment options, introduce new options, or close or terminate existing options without prior notice (where permitted by law). 4. Standard Risk Measure This is a guide as to the likely number of negative annual returns expected over any 20 year period. See What is the Standard Risk Measure? on page The risk band and risk level is based on the Standard Risk Measure. The Standard Risk Measure includes seven risk bands, from one (very low risk) to seven (very high risk). 6. What this option has returned Returns are net of investment fees and taxes as at 30 June. The returns are based on the valuation of the underlying assets as at 30 June. Investment Guide 11

12 Aim 1 Investment return objective 2 Asset allocation 3 Member-tailored options Basic Cash Cash Bond Provide you with the opportunity to construct portfolios that are appropriate to your own particular circumstances. Your portfolio may be constructed from one or more of the Basic Cash, Cash, Bond, Property, Shares, Australian Shares and Overseas Shares options, as well as from the Structured options and the Core Strategy. This permits the construction of portfolios with an extremely wide range of risk/return objectives. Match the return of the Reserve Bank cash rate target before tax and before fees over rolling 1 year periods. 100% defensive The portfolio will invest in deposits with, or short-term discount securities (bank bills and negotiable certificates of deposit) issued by, banks rated at least AA- at the time of purchase. It may also invest in short-dated debt issued and guaranteed by the Australian Commonwealth or State Governments. All securities will have a maximum term to maturity of three months. Perform in line with the Bloomberg AusBond Bank Bill Index (before tax and after fees) over rolling 1 year periods. 100% defensive A portfolio of securities with a low level of interest rate risk (12 months or less), including bank deposits, bank bills, commercial paper and floating rate notes, for example, residential mortgage backed securities. Outperform the benchmark return (before tax and after fees) over rolling 2 year periods. The benchmark is calculated using the Bloomberg AusBond Composite 0+ Yr Index, Bloomberg AusBond Inflation 0+ Yr Index Citigroup World Government Bond Index (hedged) and Barclays Global Inflation linked Index (hedged). 100% defensive A mixture of Australian and overseas debt securities issued by Governments, semigovernment authorities and companies. 100% 100% 100% Cash securities 100% Cash securities 100% Bonds 100% Suggested minimum timeframe Standard risk measure 4 3 months or less 1 to 2 years 4+ years Estimated number of negative annual returns over any 20 year period, less than 0.5 of a year Estimated number of negative annual returns over any 20 year period, less than 0.5 of a year Estimated number of negative annual returns over any 20 year period, 3 to less than 4 Risk band and level 5 Risk band 1, Very Low Risk band 1, Very Low Risk band 5, Medium to High What this option has returned 6 (Past performance is not an indication of future performance). Introduced on 1 July % % % % % 2.98% pa n/a % % % % % 3.32% pa 3.93% pa % % % % % 6.70% pa 6.20% pa Investment options with an exposure to the Australian shares asset class may include companies listed in Australia whose legal domicile is overseas. In addition, up to 10% of this asset class may be invested in stocks listed on the New Zealand Stock Exchange. 1 Aim This is the goal or objective of the investment option. 2 Investment return objective This is what the Trustee uses to determine asset allocation. It is also used to measure if the investment objective is met. It is not a guaranteed rate of return. REST does not use the Return Target (shown in the Product Dashboard available at rest.com.au/dashboard) to set the investment return objective. 3 Asset allocation For the Core Strategy option, the asset allocation will vary year to year within the ranges shown in brackets. This also means the allocation to defensive assets and growth assets will vary from time to time. 12

13 Property Shares Australian Shares Overseas Shares Provide you with the opportunity to construct portfolios that are appropriate to your own particular circumstances. A portfolio may be constructed from one or more of the Basic Cash, Cash, Bond, Property, Shares, Australian Shares and Overseas Shares options, as well as from the Structured options and the Core Strategy. This permits the construction of portfolios with an extremely wide range of risk/return objectives. Outperform both the Mercer Unlisted Property Index (before tax and after fees) over rolling 3 year periods and the 10 year bond rate plus 3% pa over rolling 5 year periods. Outperform the benchmark return (before tax and after fees) over rolling 3 year periods. The benchmark is calculated using the S&P/ ASX 300 Accumulation Index and the MSCI All Country World ex-australia Index in $AUD. Outperform the S&P/ASX 300 Accumulation Index (before tax and after fees) over rolling 3 year periods. Outperform the MSCI All Country World ex-australia Index in $AUD (before tax and after fees) over rolling 3 year periods. 100% growth (for further information, please see page 15) 100% growth A mixture of Australian and overseas shares. 100% growth 100% growth 100% 100% 100% 60% 40% Property 100% Australian shares 40% Overseas shares 60% Australian shares 100% Overseas shares 100% 10+ years 12+ years 12+ years 12+ years Estimated number of negative annual returns over any 20 year period, 3 to less than 4 Estimated number of negative annual returns over any 20 year period, 4 to less than 6 Estimated number of negative annual returns over any 20 year period, 6 years or greater Estimated number of negative annual returns over any 20 year period, 4 to less than 6 Risk band 5, Medium to High Risk band 6, High Risk band 7, Very High Risk band 6, High % % % % % 6.45% pa 6.08% pa % % % % % 13.00% pa 8.21% pa % % % % % 10.97% pa 8.78% pa % % % % % 13.82% pa 6.74% pa For all options other than the Core Strategy: The allocation to an individual asset class may vary by +/- 5% from the benchmark allocation shown, but not below 0% or more than 100% for an individual asset class; Where an option does not currently have a benchmark allocation to Cash, an allocation of up to 5% may be introduced; and The overall allocation to growth assets and defensive assets may vary by +/- 10% from the allocation shown. The Trustee reserves the right to vary the asset allocations, including the benchmarks and ranges, of all or any of the investment options, introduce new options, or close or terminate existing options without prior notice (where permitted by law). 4 Standard Risk Measure This is a guide as to the likely number of negative annual returns expected over any 20 year period. See What is the Standard Risk Measure? on page 4. 5 The risk band and risk level is based on the Standard Risk Measure. The Standard Risk Measure includes seven risk bands, from one (very low risk) to seven (very high risk). 6 What this option has returned Returns are net of investment fees and taxes as at 30 June. The returns are based on the valuation of the underlying assets as at 30 June. Investment Guide 13

14 Fees and other costs This document shows the fees and other costs that you may be charged for managing your investment with REST. These fees and other costs may be deducted from your money, from the returns on your investment or from the fund assets as a whole. For information relating to other fees and charges, please refer to the relevant Product Disclosure Statement, Member Guide and Insurance Guide. You should read all the information about fees and costs because it is important to understand their impact on your investment. Investment fee The investment fees are expenses related to the management of each investment option. They include expenses that have been paid and/or accrued such as investment management fees (including performance fees), custody fees, investment adviser fees and other investment related costs. These expenses are accrued and reflected in an option s unit price. They are not deducted directly from your account. The investment fee is expressed as an annual percentage of each investment option. The Investment Fees are our estimate of likely future investment fees only. Actual fees applied in the future may differ from the estimated fees. For each investment option, the investment fees (including performance fees) listed below are estimates only, which are based on the financial year ended 30 June Actual fees applied in the future may differ (ie higher or lower) from the estimated fees and may change without prior notice. Your annual statement will disclose the actual investment fees (including performance fees) applied for the year. For the latest investment fees please refer to rest.com.au Investment option Estimated performance fee (pa) Total estimated investment fee (pa) (including performance fee) Buy Spread Range Sell Spread* Core Strategy 0.12% 0.66% % 0.00% Cash Plus 0.02% 0.14% % 0.00% Capital Stable 0.08% 0.46% % 0.00% Balanced 0.11% 0.58% % 0.00% Diversified 0.14% 0.73% % 0.00% High Growth 0.16% 0.80% % 0.00% Basic Cash 0.00% 0.05% % 0.00% Cash 0.00% 0.04% % 0.00% Bond 0.00% 0.18% % 0.00% Shares 0.13% 0.66% % 0.00% Property 0.04% 0.58% % 0.00% Australian shares 0.24% 0.74% % 0.00% Overseas shares 0.05% 0.60% % 0.00% * As the sell spread is 0% there is no sell spread range. Performance fees Performance fees are included in, and increase, investment fees but don t affect administration fees. They are not an additional fee. Performance fees change each year and vary for each investment option. REST pays performance fees to investment managers that outperform a defined target return. Performance fees can affect any REST investment option, except Basic Cash. The percentage fee investment managers receive and the target returns vary. Buy/sell spreads Member s transactions may result in underlying assets being purchased or sold. These underlying asset transactions generally incur a transaction cost. Buy/sell spreads represent the estimated transaction costs, including brokerage fees and stamp duty, incurred when buying or selling underlying assets in relation to each investment option. There will be a separate buy and sell unit price for each investment option, the difference between the prices representing the total buy/sell spread. When money is invested in an option it will generally use the buy price. When money is withdrawn from an option it will generally use the sell price. Buy/sell spreads are not a fee paid to REST or investment managers but are used to meet underlying transaction costs when incurred. The spread charged will be an additional cost to you when you contribute to or withdraw from your account, if you switch between investment options or any other transaction is processed in your account balance (for example deduction of fees or insurance costs). If you transfer your account balance from one REST product to another, a buy/sell spread will only apply if you also change the underlying investment options. If this occurs, your new investment will be processed after the transfer is finalised. For more information on How to switch an investment option, please visit rest.com.au/investments The buy/sell spreads are set by the Trustee and may change within the range without prior notice. The spreads will be reviewed on a regular basis and available online at rest.com.au. You should consider these costs when making any investment decision. 14

15 What you need to know about REST Investments Unit prices and determining the value of your account When you invest with REST, your account balance is made up of contributions, rollovers and transfers into the Fund, plus or minus investment returns, less any fees, charges, taxes, insurance costs that apply and any benefits you claim. The value of your account is expressed in numbers of units and the unit value for each investment option. Each investment option has its own unit price, which is the monetary value of one unit. Unit prices are normally calculated by dividing the value of the assets held in the investment option after allowing for certain fees and expenses such as management fees and expenses, and taxes by the total number of units on issue for that investment option. Unit prices include an allowance for costs that would be incurred if the underlying assets were purchased or sold on the day the unit prices are calculated. Income entitlements are included in asset values to calculate the unit price. Your money will purchase a number of units in the investment option(s) of your choice. The number of units purchased depends on the value of the units (called the unit price) at the date of purchase. When money is invested in an option, it will generally use the buy price. Details of the unit prices for each investment option are available on our website at rest.com.au and click on Investments. The value of your account balance will fluctuate depending on variations to the unit price of your investment option(s) and the amount of any taxes, fees, charges and insurance costs applied to your account. Your member statement will show your account balance s dollar value and a number of units. Before you make an investment choice or leave the Fund The benefit payable to you on withdrawal from the Fund is determined by multiplying the number of units you hold by the applicable unit price at the date of withdrawal, less any taxes, fees, charges and insurance costs that may apply to your account. The unit price reflects the value of each unit in an investment option. When you switch out of an investment option or leave the Fund, the sell unit price used is at the time that your transaction is processed. Unit prices can vary. You should check the latest prices before making a decision. Valuation Policy REST values its investments regularly so that it can process transactions at values that are fair and reasonable which will usually be market value. Listed assets are valued by REST s Custodian with security prices being obtained from publicly quoted and independent security pricing services. Directly held property and unlisted assets are valued on a regular basis according to an approved valuation methodology. Once the revaluation of an investment is received it will be fully reflected in unit prices at the next available opportunity. Unit prices are generally declared on a daily basis. For more information on unit pricing, please visit rest.com.au/investments REST can delay or suspend release of unit prices, or apply a special price due to volatile market conditions and other circumstances as the Trustee deems reasonable. REST has unit pricing and market disruption policies, which when triggered, will apply instead of normal practices. Valuation considerations for REST s Property option REST s Property option has a benchmark allocation of 100% to direct property and unlisted property trusts. These investments are not listed and are not traded frequently in the marketplace, such as the share market. They are effectively illiquid assets, which means that they cannot be bought and sold quickly and valuations are updated less frequently than is the case for listed investments. The unit price for the Property option is based on the combined valuations of the underlying direct properties and unlisted property trusts. The valuations are undertaken regularly and by independent valuers, but are less frequent than for assets such as shares which are traded daily in the public markets and therefore subject to influences such as market sentiment. This means that changes in the unit price of the Property option may differ significantly from changes in the value of listed property assets. REST s directly held properties are re-valued quarterly by qualified external property valuers and the valuations for the unlisted unit trusts are undertaken in accordance with each manager s valuation policies and the frequency of valuation updates ranges from monthly up to a maximum of one year. Despite the illiquid nature of the assets for the Property option, REST is generally able to provide liquidity to REST members due to internal processes which have been established, and hence facilitate members wishing to buy or sell Property option units within the standard timeframes used for all other options. REST aims to hold a diversified range of investments and there are currently over 120 properties underlying the Property asset class. However, due to the high value nature of some of the properties held, some assets may constitute a relatively large percentage of the asset class. For example, currently the two largest directly held commercial office buildings located in the Sydney and Melbourne CBD constitute approximately 26% of the Property asset class. Property option terms and conditions Members choosing to invest in Property must agree to terms and conditions which will allow the Trustee, without prior notice, to place a freeze on transactions in the Property option for a period of up to two years. These terms and conditions have been introduced for the purpose of complying with the illiquid investment rules in Regulation 6.34A of the Superannuation Industry (Supervision) Regulations Investment Guide 15

16 What you need to know about REST Investments (continued) Members (including pension members) who select the Property option as part of their investment choice, must agree to the following terms and conditions: (a) the Property option is an illiquid investment because either or both of the following apply to the underlying investments: (i) the underlying investment (being either direct property or units in an unlisted property trust) cannot be converted to cash within 30 days to meet a member s or pension member s withdrawal, rollover, transfer or switch request ( Transaction Request ) out of the Property option; (ii) converting the underlying investment of the Property option into cash within 30 days would be likely to have a significant adverse impact on the realisable value of the investment; (b) the Trustee is not required to process Transaction Requests within 30 days; (c) the Trustee will process Transaction Requests within 30 days, unless the Trustee has frozen Transaction Requests out of the Property option; (d) the Trustee may, without prior notice, freeze Transaction Requests out of the Property option for up to two years and the member (including a pension member, to the extent applicable see below) waives their right to require the Trustee to process any Transaction Request they make until the freeze is over due to the illiquid nature of the underlying investments; and (e) the Trustee may at any time close the Property option to new contributions. In the case of pension members qualifications to the freeze terms apply see below. Should the Property option be frozen at any point in time, the Trustee will communicate this to members invested in the Property option. The Trustee will also communicate to members invested in the Property option whether contributions will be accepted into the Property option during the freeze or not. Qualifications to the Property option freeze terms and conditions apply to pension members Qualifications to the Property option freeze terms and conditions apply to pension members. Relevantly: (a) Pension members may only elect to have a maximum of 80% of their entire initial balance invested in the Property option. (b) If the Trustee determines to freeze Transaction Requests out of the Property option and a pension member has less than (or equal to) 80% of their entire balance invested in the Property option on a pension payment date during the freeze, then that pension member will still receive his or her nominated pension payment due on that pension payment date (paid firstly from and in proportion to their non-property balance(s) on that pension payment date). (c) If the Trustee determines to freeze Transaction Requests out of the Property option and a pension member has more than 80% of their entire balance invested in the Property option on a pension payment date during the freeze, then that pension member will receive his or her minimum legislated pension payment amount (but no more) on that pension payment date (paid firstly from and in proportion to their non-property balance(s) on that pension payment date). Derivatives Derivatives can refer to a wide range of financial instruments, the most common of which are futures and options. They are called derivatives because they usually derive their price from the value of an underlying security. The attraction of derivatives is that they can give investors the same degree of market exposure as the underlying assets, but with much lower transaction costs. The value of derivatives will rise and fall, just as the value will rise and fall for the underlying securities. Investors might have a number of reasons for preferring derivatives in specific situations. REST, for example, allows its investment managers to use derivatives to: protect the portfolio s value (portfolio insurance) change the interest rate sensitivity within cash and fixed interest portfolios change market exposure rapidly modify exposure to foreign currency. Superannuation law and the Australian Prudential Regulation Authority (APRA) has laid down strict conditions on the use of derivatives by super funds. REST monitors its investment managers compliance with those conditions. In the long-term, the use of derivatives is expected to enhance REST s investment returns and provide an effective way to manage risk. Asset description and reporting REST s description and reporting of asset classes, asset allocations, investment options and returns include the use of derivatives. Within asset classes such as shares there can be, from time to time, a holding of cash securities depending on how investment managers are structuring their portfolios. Trustee investment strategy We may change the underlying investment managers of the investment options at any time, including closing investment options and introducing new investment options. Within each asset class, the Trustee may implement particular investment strategies to enhance returns or reduce risk. This may be achieved by making or excluding particular investments and by using derivative instruments. 16

17 Reserves REST currently maintains a number of reserves, including an operational risk financial requirement reserve, capital reserve, group life insurance reserve and administration reserve. These reserves are maintained and used in accordance with REST s reserving strategy and policy, such as to meet any losses from operational risk and provide for capital requirements, or insurance and administration payments. REST currently has adequate provisions in its reserves. REST reserves the right to adjust unit prices in accordance with its reserving policy without prior notice. This includes transferring funds from investment option earnings to reserves which may impact the respective unit prices. Our approach to sustainable investing The Trustee is required by law to act in the best interests of REST members when exercising its duties and powers. More specifically, the Trustee has a responsibility to act in members best interests as a whole, and must not favour the interest of one group of members over another. In addition, the Trustee has a duty to promote the financial interests of REST members who are invested in the MySuper investment option. Given the diverse membership of REST and the Trustee s duty to act impartially between different groups of members, the Trustee believes that its duty requires it to focus on growing the retirement savings of its members. Sustainable investing considers factors which have the potential to impact the long-term financial performance of an investment. These factors include but are not limited to environmental, social and governance factors (ESG), exogenous factors (such as technological advances or legislative changes) and other factors which are intrinsic to the financial structure of an investment (such as leverage and refinancing risk). The Trustee primarily invests through investment managers (via mandates or pooled funds) rather than directly. The Trustee retains an investment adviser who provides advice to the Trustee in relation to the selection and monitoring of investment managers. The selection and monitoring process for investment managers includes an assessment by the investment adviser and the Trustee of a range of factors (eg investment philosophy, investment style, business structure and risk management, etc), the most important of which is the confidence by the Trustee in an investment manager s ability to deliver risk adjusted returns consistent with the intended purpose of the mandate in the context of the Trustee s overall investment objectives. Unless specified otherwise in the Trustee s mandate with an investment manager, the Trustee does not prescribe a specific methodology in relation to the extent to which sustainability matters should be taken into account by an investment manager. However, investment managers are expected to consider a range of factors relevant to the selection of underlying investments comprising their portfolios. This may include sustainability matters such as valuation, risks to revenues, gearing levels, financial stability, policy risk, governance, labour standards, environmental, social or ethical considerations, and any other factor the investment manager considers relevant to the investment of the investment manager s underlying investments. When an investment manager is initially considered, the Trustee undertakes an extensive due diligence program in conjunction with its investment adviser in regard to understanding how sustainability measures are embedded within the investment process. The Trustee recognises that sustainability issues and risks may have a material influence on the investment returns over the long term. As a result, the Trustee adopts strategies and appoints investment managers that are considered to be consistent with the Trustee s objectives as a long-term investor on behalf of its members. REST has policies in place to ensure that sustainability issues are considered when exercising voting rights and corporate actions in context on its impact on the long term investment performance. Furthermore, the Trustee continuously engages its incumbent investment managers, its investment adviser, other super funds and industry bodies to ensure sustainability matters are adequately catered for within REST s investment strategy. Fundamentally, sustainable investing is a strategic risk management issue. In this sense, investment managers that successfully identify sustainability factors and understand how such factors impact their investments over the long term are best placed to contribute to the attainment of the Fund s stated investment objectives, therefore enabling REST to meet its fiduciary duties to members. You can check your account balance and make an investment choice online in MemberAccess at rest.com.au Investment Guide 17

18 Investment managers The assets of the Fund were invested with the following investment managers as at 30 June Australian Shares Allan Gray Australia Pty Ltd Balanced Equity Management Pty Ltd Cooper Investors Pty Ltd Goldman Sachs Asset Management Australia Pty Ltd Greencape Capital Pty Ltd Paradice Investment Management Pty Ltd Renaissance Smaller Companies Pty Ltd Super Investment Management Pty Ltd* Ubique Asset Management Pty Ltd Overseas Shares Colonial First State Asset Management (Australia) Ltd Cooper Investors Pty Ltd Global Thematic Partners Holowesko Partners Ltd MFS International (UK) Ltd Northcape Capital Pty Ltd Paradice Investment Management Pty Ltd Pzena Investment Management LLC Taube Hudson Stonex Partners LLP Wellington International Management Company Pty Ltd Defensive Alternatives GMO Partners Ltd GAM International Management Limited Permal Investment Management Services Limited Growth Alternatives (Equity Strategies) Apostle Asset Management Ltd Holowesko Global Fund Ltd Growth Alternatives (Growth Opportunity) Apollo ST Fund Management LLC Babson Capital Management LLC Bentham Asset Management Pty Ltd Putnam Advisory Company LLC Super Investment Management Pty Ltd Growth Alternatives (Agriculture) Warakirri Asset Management Pty Ltd Infrastructure AMP Capital Investors Ltd Super Investment Management* Pty Ltd Property Charter Hall Funds Management Ltd GPT Funds Management Ltd Super Investment Management* Pty Ltd Bonds Brandywine Global Investment Management Ltd Franklin Templeton Investment Australia Limited Super Investment Management Pty Ltd* UBS Global Asset Management (Australia) Ltd Cash Colonial First State Asset Management (Australia) Ltd Super Investment Management Pty Ltd* Basic Cash Super Investment Management Pty Ltd* * Super Investment Management Pty Limited (ABN , AFSL ) is a wholly-owned company of the Trustee, held for the benefit of the Fund. Super Investment Management Pty Limited, like other investment managers of REST, receives a fee for its investment management services. REST deals with Super Investment Management Pty Limited on an arms-length basis. 18

19 Terms explained Below is an explanation of some of the terms you will find within this booklet. Aim The goal for the investment option, to be assessed against the investment return objective. Asset allocation How an investment is spread across the different asset classes. Asset class A category of investment, such as shares, fixed interest or property. Benchmark a. The asset allocation expected to apply to an investment option most (but not all) of the time, as it is the allocation most likely to achieve an investment s long-term objectives. b. An index against which an investment managers performance is measured, eg an Australian share manager s performance may be measured against the S&P/ASX 300 Accumulation Index which measures the performance of the top 300 publicly listed companies in Australia. Buy/sell spread Represents the estimated transaction costs, including brokerage fees and stamp duty, incurred when buying or selling underlying assets in relation to our investment options. Consumer price index (CPI) A measure of inflation that compares the cost of living (ie goods and services) over time. CPI is calculated and reported by the Australian Bureau of Statistics. Defensive assets Assets that are less risky but generally produce lower returns over the long-term such as cash and bonds. Diversification Spreading your money across different assets, investment options, investment managers or localities to help reduce risk. In other words: not putting all your eggs in the one basket. Future transactions Includes all contributions, rollovers or transfers in, as well as transfers out, benefit claims, fees, charges, taxes, insurance cost and other deductions that apply to your account after the effective date of the nomination. Growth assets Assets that are more risky but generally produce higher returns over the long-term such as shares and property. Inflation The rise in the prices of goods and services, often measured by the Consumer Price Index. Interest The amount paid in a certain period on money borrowed or invested. It is usually expressed as a percentage. Investment manager A person or organisation contracted to manage investments on behalf of the Trustee. Investment return objective The return that the Trustee is aiming to achieve. This is not a guaranteed rate of return. Return The amount that an investment has changed over time (positive or negative), usually expressed as an annual percentage. Risk The possibility that an investment will have an undesirable outcome. Generally, the higher the potential return of an investment, the higher the risk. Standard risk measure A guide to the likely number of negative annual returns expected over any 20 year period. Switching Moving some or all of your current balance from one investment option to another. Time horizon The period of time that you intend to keep your investment. Unit price The monetary value of one unit in an investment option. Volatility The extent to which the price of an investment moves up and down. Investment Guide 19

20 Application to to make an an investment choice Office Office Use Use You You can can complete an online an online version version of this of this form form quickly quickly and and easily easily in MemberAccess in at rest.com.au. at Or, you Or, you can can complete this this form form and and mail mail it to: it REST to: REST Industry Industry Super, Super, PO PO Box Box 350, 350, Parramatta NSW NSW Use Use this this form form to select to select an investment an option, option, or to or change to change your your investment option. option. Please Please write write in BLOCK in BLOCK LETTERS and and use use a BLACK a BLACK or or BLUE BLUE pen. pen. This This form form will will be invalid be invalid if unsigned if and and undated. undated. Investment options options other other than than Core Core Strategy Strategy are are not not classified as MySuper as MySuper products. Fields Fields marked marked * are * are mandatory. If you If you do not do not complete all mandatory all fields, fields, there there may may be a be delay a delay in processing your your request. request. Section 1: Personal 1: details details (fields (fields with with * are * required) are required) Member Member number* number* Mr/Mrs/Ms/Miss/Dr Surname* Given Given name(s)* Date Date of birth of birth (dd/mm/yyyy)* Unit Unit number* number* Street Street number* number* Street Street name* name* Suburb/Town* State* State* Postcode* Telephone (business hours) hours) Mobile Mobile address address Section 2: Investment 2: choice choice Select Select either either Option Option 1 or 1 Option or Option 2 2 Option Option 1 1 Option Option 2 2 If you If you would would like like If you If you would would like like your your current current balance balance and and your your entire entire current current any any future future transactions allocated allocated in a in different a different balance balance and and any any way, way, complete both both of these of these columns columns future future transactions Current Current balance balance Future Future transactions allocated allocated in the in the same same way, way, complete this this Either Either You You must must complete complete column column only only Tick Tick this this box: box: this this column column even even if if Do not Do switch not switch my my there there is no is change no change current current balance balance in the in the way way you you would would Or Or like like your your future future Choose Choose how how you you would would transactions allocated. like like to switch to switch your your current current Investment code code balance balance below: below: Core Core Strategy Strategy B1 B1. % %. % %. % % Structured options options Cash Cash Plus Plus A1 A1. % % % Capital Stable A2 %. % %. % % Capital Stable A2. % Balanced A3 %. % %. % % Balanced A3. % A4 %. % %. % % Diversified A4. % High Growth A5 %. % %. % % High Growth A5. %. %. % % Member-tailored options options Basic Basic Cash Cash C7 C7. % % % Cash C1 %. % %. % % Cash C1. % Bond C2 %. % %. % % Bond C2. % Shares C3 %. % %. % % Shares C3. % Australian Shares C4 %. % %. % % Australian Shares C4. % Overseas Shares C5 %. % %. % % Overseas Shares C5. % Property* C6 %. % %. % % Property* C6. %. %. % % Total Total. % %. % %. % % *Conditions apply. apply. See See Declaration. Must Must total total 100% 100% Must Must total total 100% 100% Must Must total total 100% 100% The Trustee The Trustee company company of Retail of Retail Employees Superannuation Trust Trust ABN ABN is Retail is Retail Employees Superannuation Pty Limited Pty Limited ABN ABN , , AFSL AFSL Registered Registered Office: Office: Level Level 7, 507, Carrington 50 Carrington Street, Street, Sydney Sydney NSW NSW Issue Issue date: date: 1 October 1 October Page Page 1 of 12 of 2