STATE SUPER INVESTMENT FUND CLASS A

Transcription

1 STATE SUPER INVESTMENT FUND CLASS A Product Disclosure Statement Date of Issue 1 July 2014 State Super Financial Services Australia Limited ABN Australian Financial Services Licence No

2 Read this This Product Disclosure Statement (PDS) is designed to help you understand the main features of the registered managed investment schemes that comprise the State Super Investment (Investment ). The Investment currently consists of the following managed investment schemes (s): Cash ARSN Fixed Interest ARSN Capital Stable ARSN Moderate ARSN Balanced ARSN Growth ARSN Growth Plus ARSN Australian Equities ARSN International Equities ARSN When you invest in a you purchase units in a particular class of the. This PDS relates to Class A units in each. In this PDS, when we refer to the Investment we are referring to the Investment Class A, and when we refer to units in a, we are referring to Class A units. It is important to bear in mind that this PDS contains general information only about the Investment. It does not contain financial product advice nor does it take into account your specific objectives, financial situation or needs. You should consider whether it is appropriate to you, having regard to your objectives, financial situation and needs. We recommend that you read this PDS carefully and consult your financial planner before investing in the Investment. State Super Financial Services Australia Limited ABN , AFSL Number (referred to in this PDS as SSFS, the responsible entity, the trustee, we, us) is the responsible entity of each of the schemes comprising the Investment and issues the interests (called units) in each of these schemes. This PDS is issued solely by SSFS. No other person (whether or not related to SSFS) is responsible for any information contained in this PDS. In this PDS, we refer to SSFS in two roles. Firstly, as the provider of financial planning services, and secondly, as the responsible entity of the nine schemes that comprise the Investment. The Investment is available only to Australian resident taxpayers. Your investment in the Investment is subject to investment risk. This is because the value of your scheme (and accordingly, your investment in that scheme) may rise and fall, and at times the returns in a scheme may be negative. None of the Commonwealth, State or Territory Governments, SSFS, the SAS Trustee Corporation, the investment managers we appoint or our service providers or their respective officers, employees or agents guarantee that your investment in the Investment will increase or retain its value, guarantee the repayment of the money you invest in the Investment or guarantee the performance of each scheme that comprises the Investment. The information in each PDS and the Booklets may change from time to time. We may update information which is not materially adverse to you on ssfs.com.au. A paper copy can also be obtained without charge from your financial planner or by calling We may change any of the matters described in the PDS and the Booklets from time to time. We will notify you of material or significant changes which may affect you before or after the change has taken place in accordance with the law. Changes to s To ensure that the range of s continues to suit the investment needs of our investors, we regularly monitor our s and investment managers. We may add, close or terminate s, add new investment managers, as well as change the aim and strategy and asset range or benchmark of a at any time, without prior notice to investors. If a is terminated, we will switch your moneys invested in that to another, which will generally be of a similar risk/return profile. We will notify you about any material changes to the s or investment managers. 2 State Super Investment Class A Product Disclosure Statement

3 Contents STATE SUPER INVESTMENT FUND CLASS A State Super Financial Services Australia Limited 4 The Investment 4 Investment process 5 What are the risks of investing? 8 Investment options 9 How to invest 20 How to switch and withdraw 21 Transaction processing 23 Reporting 25 Death benefits 25 Fees and other costs 26 Taxation 34 Additional Information 35 Directory 38 Application forms Application form Regular investment application form REGISTERED OFFICE Level 7, 83 Clarence Street, SYDNEY Mail: GPO Box 5336 Sydney NSW 2001 Telephone: Fax: Internet: Visit our website or call for further information 3

4 State Super Financial Services Who is State Super Financial Services Australia Limited? SSFS is an integrated financial planning firm providing financial planning, funds management and implementation solutions. Services may be provided to current and former public sector employees (from all states, territories and federal and local government) and their family members. The financial planning service provides you with financial advice and assistance to enable you to develop your financial strategy and investment portfolio in consultation with one of our financial planners. In this way, we are able to assist you with many of the complex issues often associated with making investment decisions. Our funds management service involves us acting as the trustee or responsible entity of a number of investment products, including as responsible entity of each scheme in the Investment. We combine specialist investment managers to seek investment returns consistent with the objective and level of risk for each scheme. The investment managers are rigorously and continuously monitored to ensure compliance with their investment mandates. Because the investment managers manage significant pools of assets we are able to negotiate competitive investment management fees on your behalf. Our combined financial planning and funds management services benefit you by having your financial strategy and investment managed by the one organisation, yet spreading your money across a number of investment managers and markets. What can our financial planning service offer you? This service is designed to help you achieve your personal investment and financial goals. The benefits you receive from our financial planning service include: access to a qualified financial planner who is trained and supported in the technical issues and changes that are important to financial planning; the development of a financial and investment strategy tailored to your individual needs; the preparation of a personal financial plan; the opportunity to review your financial needs with a financial planner; reporting on a half yearly basis. The Investment The Investment has been designed to allow you to develop your own financial strategy and investment portfolio in conjunction with your financial planner. Classes of units When you invest in a you purchase units in a particular class of the. The Trustee may allow different fees to be charged to different classes, although all investors of a single class will be treated equally. This PDS relates to Class A units only. 4 State Super Investment Class A Product Disclosure Statement

5 Investment process Managed investment schemes to choose from A basic requirement of successful investment is diversification. You can choose to invest in one or a combination of managed investment schemes (called s), each having a separate investment strategy. These are: the Cash the Fixed Interest the Capital Stable the Moderate the Balanced the Growth the Growth Plus the Australian Equities the International Equities Details of these s including their investment strategies are set out on pages 11 to 19. How do we manage your money? We operate a multi-manager investment approach in which the assets of the s are typically managed by external specialist investment managers, either directly or through a series of discrete investment trusts, of which we are the trustee. We regularly monitor the investment performance of each and the investment mandates of the investment managers. We may change investment managers from time to time without notice to you. You can find the current list of investment managers by going to ssfs.com.au/fund-managers. The assets you will have exposure to will depend on the (s) you choose to invest in. Asset Allocation ranges For each we have set a minimum and maximum amount that can be invested in each asset class, called the asset allocation range, which is shown on pages 11 to 19. Strategic asset allocation Each has a medium to longer term target allocation of assets between the asset classes (called the strategic asset allocation for the ), based on the investment objective (goal) of that. The strategic asset allocation current as at the date of this PDS is set out on pages 11 to 19. We may review and vary a s strategic asset allocation from time to time, consistent with the investment objective of each without notice to you. However, the strategic asset allocation will be within the asset allocation range shown on pages 11 to 19. We regularly review the assets associated with each and, where necessary, take steps to buy and sell assets to maintain each around its strategic asset allocation, as adjusted by any strategic tilt (see below). Strategic tilting The tables on pages 11 to 19 setting out the strategic asset allocations for each represent the medium to longer term target asset allocations of the s. However, the short to medium term target asset allocations of the s in place at any particular time may vary from the target amounts set out in the tables on pages 11 to 19. This is because the trustee has adopted a strategic tilting approach to target asset allocations. When opportunities arise due to market movements, the trustee may make modest changes to the target asset allocation of one or more s with the intention of improving the s ability to meet its performance and risk objectives. Strategic tilts are generally in place for the short to medium term, and must be consistent with the investment objective and investment strategy for a. Any strategic tilt will also be within the asset allocation range for the. Strategic tilting can be applied across, or within, asset classes and may also apply to the proportion of international equity exposure that is hedged back to Australian dollars. The medium to longer term target strategic asset allocations remain unchanged when a strategic tilt is in place. When a strategic tilt ends, the target allocation of assets of a returns to the strategic asset allocation. Strategic tilts may be implemented from time to time and without prior notice. The strategic asset allocation of the s in force at any particular time is available on the State Super Financial Services website (ssfs.com.au) or you can obtain a copy without additional charge from your financial planner. Visit our website or call for further information 5

6 Investment process Derivatives Derivatives are contracts between two parties providing for a payoff from one party to the other based on the price of a reference asset (e.g. a share price index). Derivatives may be used to manage risk. For example you may use derivatives to hedge exposure to assets denominated in a foreign currency. Derivatives may be used to gain exposure to assets more cost effectively than buying and selling directly (e.g. when transitioning a portfolio to a new investment manager or undertaking a strategic tilt). Derivatives can also be used to enhance returns from certain market movements. This can include leveraging your exposure to an asset or by synthetically selling an asset you do not own with the aim of profiting from a fall in price of the asset. This is often termed short selling. Environmental, social and governance issues We believe that Environmental, social and governance (ESG) issues may affect the performance of investment portfolios to varying degrees through time. We believe that companies that have a greater regard to ESG issues when making investment decisions (that is, decisions about selecting, retaining or realising an investment) can increase returns to shareholders by properly managing risks while at the same time contributing to the sustainable development of the societies in which they operate. Our aim is to incorporate ESG issues into our investment analysis and decision making processes and to seek to ensure appropriate disclosure and reporting on ESG matters. We have no pre-determined views regarding what constitutes environmental, social or governance matters or how (or the extent to which) these matters should be incorporated into investment practices (e.g. the use of negative filters preventing investment in particular assets and/or the use of positive filters directing investment in assets which satisfy ESG criteria). We primarily entrust integration of ESG issues to the external investment managers we utilise. Whilst we currently do not require all investment managers to integrate ESG considerations into their investment process we consider a manager s capabilities on ESG matters as part of our manager selection and review process. You can read our ESG policy on our website (ssfs.com.au/esg) or you can obtain a copy without additional charge from your financial planner. Proxy voting Outcomes of Proxy Voting activity undertaken by investment managers is available on the website (ssfs.com.au). What are the asset classes? The following paragraphs describe the various asset classes in which we currently invest. We may vary the asset classes from time to time. Cash This asset class includes short term debt securities and term deposits issued with a term to maturity of less than one year. The short term debt securities are issued or guaranteed by the Australian Government (or the Government of a State or Territory of Australia), Australian banks and other issuers of high credit quality. The term deposits are issued by Australian and international banks in Australian dollars and are not guaranteed by any Government entity. Enhanced Cash This asset class includes cash and investment grade higher yielding debt securities such as floating rate notes, mortgage backed securities, asset backed securities and corporate bonds. Investment grade securities are those rated at least BBB- by Standard & Poor s or Baa3 or higher by Moody s. The enhanced cash portfolio maintains an average duration similar to that of traditional cash type investments. Investments may include derivatives such as futures and options contracts. Australian Fixed Interest This asset class includes debt securities issued by the Australian Government or the Government of a State or Territory of Australia. It also includes investments in investment grade, higher yielding debt securities such as floating rate notes, corporate bonds, corporate loans and short-term securities. Investments may include derivatives such as futures and options contracts. International Fixed Interest This asset class includes debt securities issued by the government of a country outside Australia and non-government investment grade, higher yielding 6 State Super Investment Class A Product Disclosure Statement

7 Investment process debt securities such as floating rate notes, corporate bonds, corporate loans, asset and mortgage backed securities and short-term securities. Investments may include derivatives such as futures and options contracts. International fixed interest investments are typically 100% hedged to the Australian Dollar. However, the actual level of hedging at any time may vary and can be different across different currencies. Property This asset class incorporates both listed property and unlisted property. Listed property includes units or ordinary shares of property trusts and property related companies, which are listed on the Australian and recognised overseas securities exchanges. Unlisted property provides exposure to Australian and international property via units or shares in unlisted managed investment schemes or unit trusts. International property investments are generally at least partly hedged to the Australian Dollar. However the actual level of hedging at any time may vary and can be different across different currencies. Infrastructure This asset class incorporates both listed and unlisted infrastructure. Listed infrastructure securities include units or ordinary shares of infrastructure trusts and infrastructure related companies listed on recognised overseas and Australian securities exchanges. Unlisted infrastructure provides exposure to Australian and international infrastructure assets via units or shares in unlisted managed investment schemes or unit trusts. Infrastructure assets include toll roads, airports and utilities. Global infrastructure investments are generally at least partly hedged to the Australian dollar. However, the actual level of hedging at any time may vary and can be different across different currencies. Global High Yield This asset class includes a range of debt securities including non-investment grade higher yielding debt securities such as floating rate notes, corporate bonds, asset and mortgage backed securities and emerging market government, supranational and corporate securities. Non-investment grade securities are those rated lower than BBB- by Standard & Poor s or Baa3 by Moody s. Investments may include derivatives such as futures and options contracts. Global high yield investments are typically 100% hedged to the Australian dollar. However, the actual level of hedging at any time may vary and can be different across different currencies. Australian Equities This asset class includes ordinary shares, preference shares and other equity securities or derivatives of companies or trusts listed on the Australian Securities Exchange. This asset class can also include investment in unlisted companies (i.e. private equity) that will have lower liquidity than listed securities. International Equities This asset class includes companies listed on a recognised overseas securities exchange. Investments include ordinary shares, preference shares convertible securities and other equity securities or derivatives of companies or trusts listed on these exchanges. This asset class can also include investment in unlisted companies (i.e. private equity) that will have lower liquidity than listed securities. International equity investments are generally partly hedged to the Australian dollar. However the actual level of hedging at any time may vary and can be different across different currencies. Alternative assets Alternative assets can be used to reduce risk and/or enhance returns. The asset class includes a range of investments such as commodities, hedge funds and currencies. Hedge funds employ non-traditional strategies and many aim to provide positive returns when traditional asset classes experience negative returns. Alternative assets are typically not traded on listed exchanges and therefore have lower liquidity compared to listed securities. Our allocation to this asset class will vary over time, and depending on available opportunities may be invested in as few as one of these sub-asset classes (e.g. hedge funds). How are the assets of each held? We have appointed JPMorgan Chase Bank N.A. as Custodian, whose role is to: hold the assets of the s, and the discrete investment trusts in which the Cash, Fixed Interest, Capital Stable, Moderate, Balanced, Growth, Growth Plus, Australian Equities and International Equities s invest, on our behalf; and perform certain administrative, accounting, monitoring and reporting functions, for both the s and the discrete investment trusts. We may replace the Custodian at any time without notice to you. Visit our website or call for further information 7

8 What are the risks of investing What are the risks of investing? All investments involve some level of risk. Risk can generally be managed but may not be able to be avoided completely. These risks can be broadly grouped into two categories: operational (process) risks and investment risks. The following are some risk factors you should consider before investing. Operational (process) risks risk a could be terminated, or we could be replaced as responsible entity. Custodial risk the Custodian holds the assets of the s and the discrete investment trusts in which the s invest. There are custodial risks associated with this duty not being properly performed. We mitigate this risk by having a rigorous and detailed assessment of the Custodian s capabilities prior to appointment, adhering to a policy of having formal agreements with the Custodian which detail the services and responsibilities it has been contracted to provide, and by undertaking periodic operational and performance reviews of the Custodian. Compliance risk compliance is continuously monitored both externally (by our Custodian) and internally (by our Investment and Compliance teams). Appointed investment managers are monitored for us by the Custodian for compliance against their individual investment mandates and investment guidelines. There is a risk that a breach may not be detected in a timely or effective manner. Legislative risk changes may be made to taxation and other laws, which may affect the value of your investment. Counterparty risk there is a risk of loss where the counterparty to a contract cannot meet its payment obligations. This risk is mitigated by appointing investment managers with appropriate credit assessment skills and imposing limits in the investment mandates. Investment risks Some of the investment risks you may be exposed to include: Market risk economic, technological, political or legal conditions can change which can adversely affect investment markets. In turn, this can adversely affect the value of your investments. Maintaining a well-diversified portfolio across the asset classes can reduce, but not eliminate, the impact of market risk. Asset allocation risk the risk that the asset allocation of the may not achieve its investment objectives. We mitigate this risk by careful research using our own expertise and that of specialist asset consultants. Interest rate risk changes in interest rates can have a negative effect on investment value or returns. For example, the cost of a company s borrowings can increase or the income return on a fixed interest investment can be lower than expected. This risk is mitigated by hiring professional, specialist investment managers. Security risk within each asset class, individual securities such as shares and government or corporate bonds are affected by risks specific to that security. For example, the value of a company s shares may be impacted by a change in company strategy or merger and acquisition activity. We mitigate this risk by using a diversified mix of specialist investment managers who we believe are the most appropriate for each asset class. Currency risk where we invest overseas, and the currency of the countries in which we invest changes in value relative to our dollar, the value of the investments will change. We mitigate this risk by managing the currency exposure as described on pages 9 to 17 by employing specialist currency managers. Manager selection risk under a manager-ofmanagers investment structure there is a risk that the combination of managers selected for each specialist sector may underperform their objectives. We mitigate this risk by careful research and monitoring of investment managers using our own expertise and that of specialist asset consultants. Issuer concentration risk where an aggregation of exposure across different asset classes can lead to excessive exposure to single name issuers. We mitigate this risk by implementing a counterparty risk policy and by monitoring aggregation of exposures. Illiquidity risk where an investment may not be able to be quickly sold for a value that approximates its prevailing market value. We mitigate this risk through limiting investment in less liquid investments and ongoing monitoring of liquidity. 8 State Super Investment Class A Product Disclosure Statement

9 Investment options Derivative and short selling risk investing in derivatives or short selling securities can expose a portfolio to additional risks. These include the possibility that the derivative position does not perform as expected or that parties do not perform their obligations under the contract. As using derivatives may involve leverage, losses can be significant. We mitigate this risk by having a specific Derivative Risk Statement. Strategic tilting may increase one or more of these investment risks. However, as any strategic tilt will be modest in size, the trustee expects that the additional risk will not be significant. In summary There are risks in choosing to invest in managed investment schemes. There are also risks in choosing particular s as different asset classes perform differently at different times. Since each has a different investment mix, the risks associated with investing in each are different. For example, the Cash carries fewer risks than the Growth due to the differing investments held and differing markets into which each invests. What are the differences between the s? Each has a different investment objective (goal) and strategy (way of achieving its goal). Each invests in different kinds of assets with the mix of assets depending on the objective of each. There is a risk that your investment in a will fall in value from time to time the level of this risk varies with the objective, strategy and asset mix of the. Estimations of the number of years of negative annual returns in any 20 year period shown as the Standard Risk Measure for each investment option are based on long term-assumptions about the capital markets as obtained from sources including professional investment advisers. We recommend that you consult your financial planner prior to making your investment decision. Visit our website or call for further information 9

10 Investment options Standard Risk Measure We have adopted the Standard Risk Measure, which is based on industry guidance to allow investors to compare investment options within and across investment products that are expected to deliver a similar number of negative annual returns over any 20 year period. The Standard Risk Measure is not a complete assessment of all forms of investment risk; for instance, it does not detail what the size of a potential negative return could be or the potential for a positive return to be less than an investor may require to meet their objectives. Further, it does not take into account the impact of tax on the likelihood of a negative return. The Standard Risk Measure should not be considered personal advice. You should regularly review your investment decision with your financial adviser. More detail on risks which may affect your investment is included in the What are the risks of investing section on page 8. You should still ensure you are comfortable with the risks and potential losses associated with your chosen investment options. You can find further information about how the Standard Risk Measure is calculated at ssfs.com.au/our-investment-approach. Risk Band Risk Label Expected frequency of negative annual returns over any 20 year period 1 Very Low Less than 0.5 years 2 Low 0.5 to less than 1 year 3 Low to Medium 1 to less than 2 years 4 Medium 2 to less than 3 years 5 Medium to High 3 to less than 4 years 6 High 4 to less than 6 years 7 Very High 6 or more years A description of each of the s their risk profile, their current strategic asset allocations and their asset allocation ranges is set out in the tables on pages 11 to 19. Relative Risk Profile The relative risk profile of each fund can be illustrated by the chart shown below. HIGHER Expected Return BALANCED MODERATE CAPITAL STABLE GROWTH GROWTH PLUS AUSTRALIAN / INTERNATIONAL EQUITIES FIXED INTEREST LOWER CASH LOWER Expected Risk The above graph provides a broad overview of the relative overall risk associated with each for comparison purposes only. Expected Return is illustrative only and is not a forecast or prediction of the future returns of the s. Each is subject to different types of risks, and can be impacted by those particular risks to varying degrees, depending on the nature of the s investments. For these reasons, the above graph should not be relied on as providing an accurate indication of the level of risk associated with any one. For further information regarding the risk profile of each, see the descriptions of each set out on pages 11 to 19. HIGHER 10 State Super Investment Class A Product Disclosure Statement

11 Investment options Cash Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe To achieve rates of return consistent with the yield on the UBS Australia Bank Bill Index. To meet or exceed the returns of a cash benchmark net of investment fees and taxes over rolling 12 month periods. Primarily invests 2 in short term debt securities and term deposits with a maturity of less than one year. The short term debt securities are issued, guaranteed or otherwise supported by the Australian or State Governments of Australia (or their statutory authorities) or by Australian banks and authorised dealers in the short term money market. The term deposits are issued by Australian and international banks in Australian dollars and are not guaranteed by any Government entity. 1 Very low Designed to suit investors with a time horizon of up to 2 years and who seek secure returns from cash. Up to 2 years Strategic asset allocation Defensive assets Cash Target 100% 100% Range n/a 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. The current benchmark is the UBS Australian Bank Bill Index. The benchmark index stated may be substituted for a similar benchmark index consistent with the overall objective of the without prior notice. 2 Through discrete investment trusts. Further information If you would like to obtain information about investment returns for the Investment then go to our website located at ssfs.com.au or contact any of our offices. Past performance is not a reliable predictor of future investment returns. Markets can be volatile and can move rapidly up or down. Visit our website or call for further information 11

12 Investment options Fixed Interest Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe To invest in fixed interest securities and related instruments, which aim to provide the potential for modest capital growth over the medium term. Capital gains can be expected to be achieved, but there is also the risk of capital loss. To meet or exceed the return of a blend of 70% Australian and 30% Global fixed interest benchmarks net of investment fees and taxes over rolling 3 year periods. Primarily invests 2 in a broad range of Australian and overseas fixed interest investments. 2 Low Designed to suit investors who wish to take moderate levels of risk with a modest potential for capital appreciation. 2 years Strategic asset allocation Target Defensive assets 100% Australian fixed interest 70% International fixed interest* 30% Range n/a 40% to 80% 20% to 60% * Typically 100% hedged to the AUD 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. The current benchmark is 70% UBS All Maturities Composite Bond Index and 21% Barclays Capital Global Aggregate (ex-treasury) Index 100% hedged and 9% PIMCO GLADI Government Index 100% hedged. The benchmark index, including the split between Australian and Global benchmarks, may be substituted for a similar benchmark index consistent with the overall objective of the without prior notice. 2 Through discrete investment trusts 12 State Super Investment Class A Product Disclosure Statement

13 Investment options Capital Stable Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe To maintain the value of investors capital while achieving a higher rate of return over the medium term than could be achieved through investments in cash or short term money market securities. Capital gains can be achieved, but there is also the risk of capital loss. Accordingly, the value of investments in the may fall as well as rise in line with the changing value of the assets of the. CPI + 2.5% net of investment fees and taxes over rolling three year periods. Primarily invests 2 in a diversified portfolio of defensive and growth assets including (but not limited to) cash, fixed interest securities, property, listed and unlisted shares and infrastructure assets. To maintain a low risk profile exposure to growth assets is constrained. Investments may include currency, futures and options contracts. 2 Low Designed to suit investors who seek some capital growth over the medium term (3-4 years) while at the same time maintaining a relatively high level of capital security. 3-4 years Strategic asset allocation (Current to 30 September 2014) Defensive assets Cash & enhanced cash Australian fixed interest Growth assets Property Australian equities Target Range 80% 80% to 90% 48% 35% to 65% 32% 25% to 40% 20% 10% to 20% 8% 0% to 10% 12% 5% to 15% Strategic asset allocation (From 1 October 2014) Defensive assets Cash & enhanced cash Australian fixed interest Growth assets Property Australian equities International equities* Alternatives* * 0 to 100% hedged to the AUD Target Range 80% 70% to 90% 48% 15% to 80% 32% 20% to 40% 20% 10% to 30% 7% 0% to 17% 7% 3% to 15% 3% 0% to 8% 3% 0% to 5% 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. 2 Through discrete investment trusts. Visit our website or call for further information 13

14 Investment options Moderate Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe To invest in a broad range of asset classes which have the potential to achieve moderate capital growth over the medium to longer term. Capital gains can be expected to be achieved, but there is also the risk of capital loss. CPI + 3.0% net of investment fees and taxes over rolling five year periods. Primarily invests 2 in a diversified portfolio of defensive and growth assets. Defensive assets include fixed interest securities and cash. Growth assets, include Australian and overseas listed shares, property, infrastructure securities and alternative assets. Investments may include currency, futures and options contracts. 3 Low to medium Designed to suit investors who seek capital growth over the medium term and are willing to accept a moderate level of risk. 4-5 years Strategic asset allocation Target Defensive assets 60% Cash & enhanced cash 20% Australian fixed interest 28% International fixed interest* 12% Growth assets 40% Property** 8% Infrastructure** 4% Global High Yield* 2% Australian equities 11% International equities** 10% Alternatives** 5% Range 50% to 70% 5% to 40% 20% to 40% 10% to 20% 30% to 50% 0% to 15% 0% to 8% 0% to 5% 5% to 15% 5% to15% 0% to 10% * Typically 100% hedged to the AUD ** 0-100% hedged to the AUD 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. 2 Through discrete investment trusts. 14 State Super Investment Class A Product Disclosure Statement

15 Investment options Balanced Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe To invest in a broad range of asset classes which have the potential to achieve capital growth over the longer term. Capital gains can be expected to be achieved, but there is also the risk of capital loss. CPI % net of investment fees and taxes over rolling 5 year periods. Primarily invests 2 in a portfolio of Australian and overseas investments including (but not limited to) Australian cash, fixed interest securities, property, unit trusts, listed shares and alternative assets. Investments may include currency, futures and options contracts. 4 Medium Designed to suit investors who are seeking higher returns and are willing to accept a higher level of risk. 5-6 years or longer Strategic asset allocation Target Defensive assets 40% Cash & enhanced cash 10% Australian fixed interest 20% International fixed interest* 10% Growth assets 60% Property** 8.5% Infrastructure** 3% Global High Yield* 3% Australian equities 21% International equities** 20% Alternatives** 4.5% Range 30% to 50% 0% to 30% 10% to 30% 5% to 15% 50% to 70% 0% to 15% 0% to 10% 0% to 6% 10% to 30% 10% to 30% 0% to 10% * Typically 100% hedged to the AUD ** 0-100% hedged to the AUD 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. 2 Through discrete investment trusts. Visit our website or call for further information 15

16 Investment options Growth Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe To invest substantially in assets which achieve capital growth over the long term (7 or more years). Capital gains can be expected to be achieved, but there is also the risk of capital loss. CPI + 4.0% net of investment fees and taxes over rolling seven year periods. Primarily invests 2 in a broad range of Australian and overseas investments with a strong bias on capital growth. Such investments include (but are not limited to) listed shares property, alternative assets, interest bearing securities and deposits Investments may include currency, futures and options contracts. 5 Medium to high Designed to suit investors who wish to maximise long term investment returns and are willing to accept a higher level of risk than the Balanced. 7 or more years Strategic asset allocation Target Defensive assets 15% Cash & enhanced cash 3.5% Australian fixed interest 7.5% International fixed interest* 4% Growth assets 85% Property** 6% Infrastructure** 5% Global High Yield* 5% Australian equities 32% International equities** 32% Alternatives** 5% Range 10% to 30% 0% to 15% 0% to 15% 0% to 7.5% 70% to 90% 0% to 18% 0% to 15% 0% to 10% 20% to 40% 20% to 40% 0% to 10% * Typically 100% hedged to the AUD ** 0-100% hedged to the AUD 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. 2 Through discrete investment trusts. 16 State Super Investment Class A Product Disclosure Statement

17 Investment options Growth Plus Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe Strategic asset allocation To invest in assets which achieve capital growth over the long term (10 or more years). Capital gains can be expected to be achieved, but there is also the risk of capital loss. CPI % net of investment fees and taxes over rolling ten year periods. Primarily invests 2 in a broad range of high growth assets. Such investments include (but are not limited to) listed Australian and overseas shares, property infrastructure securities and alternative assets. Investments may include currency, futures and options contracts. 6 High Designed to suit investors who wish to maximise long term investment returns and are willing to accept a higher level of risk than the Growth. 10 years or longer Defensive assets Cash & enhanced cash Australian fixed interest International fixed interest* Target 0% 0% 0% 0% Range 0% to 10% 0% to 10% 0% to 5% 0% to 5% Growth assets 100% 90% to 100% Property** Infrastructure** Global High Yield* Australian equities International equities** Alternatives** 5% 7% 6% 40% 37% 5% 0% to 10% 0% to 15% 0% to 10% 30% to 50% 25% to 45% 0% to 10% * Typically 100% hedged to the AUD ** 0-100% hedged to the AUD 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. 2 Through discrete investment trusts. Visit our website or call for further information 17

18 Investment options Australian Equities Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe To invest in Australian equities with the aim of achieving capital growth over the long term (10 or more years). Capital gains can be expected to be achieved, but there is also the risk of capital loss. To meet or exceed the return of the benchmark over rolling five year periods net of investment fees and taxes. Primarily invests 2 in Australian equities. Investments may include futures and options contracts. 6 High Designed to suit investors who wish to maximise long term investment returns and have a 100% exposure to Australian equities. 10 years or longer Strategic asset allocation Growth assets Target 100% Range n/a Australian equities 100% 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. The current benchmark is the FTSE ASFA Australia 300 Tax Exempt Index. The benchmark index stated may be substituted for a similar benchmark index consistent with the overall objective of the without prior notice. 2 Through discrete investment trusts. 18 State Super Investment Class A Product Disclosure Statement

19 Investment options International Equities Overall Objective Return Objective 1 Investment strategy Standard Risk Measure Type of investor this option is intended to be suitable for Minimum suggested investment timeframe To invest in international equities with the aim of achieving capital growth over the long term (10 or more years). Capital gains can be expected to be achieved, but there is also the risk of capital loss. To meet or exceed the return of the benchmark over rolling five year periods. Primarily invests 2 in international equities. Investments may include currency, futures and options contracts. 6 High Designed to suit investors who wish to maximise long term investment returns and have a 100% exposure to international equities. 10 years or longer Strategic asset allocation Growth assets Target 100% Range n/a International equities** 100% ** 0 to 100% hedged to the AUD 1 The return objective is not a guarantee of performance. The actual return may vary up or down from the return objective stated. The current benchmark is 85% MSCI World ex Australia Index (partly hedged) and 15% MSCI Emerging Market Free Index (unhedged). The benchmark index stated, including the split between benchmarks, may be substituted for a similar benchmark index consistent with the overall objective of the without prior notice. 2 Through discrete investment trusts. Visit our website or call for further information 19

20 How to invest How much is needed? Initial investment: The minimum initial investment in the Investment is $10,000 and the minimum initial investment in any one is $500. Additional investment: Each subsequent ad hoc investment in a must be at least $500, and each monthly investment in a under the Regular Savings Plan must be at least $100. Who can invest? We will only accept investments into the Investment from Australian resident taxpayers. If at any time we are not satisfied that you qualify as an Australian resident taxpayer, we have the right under the trust deed to redeem your investment in full. Further we may refuse to accept an application to invest in one or more s in the Investment without giving reasons. How can you invest in the Investment? Initial investments To make an initial investment in the Investment complete the application form and send it to us together with, unless you are transferring from an existing SSFS product, your cheque to Attention: Registry Services, State Super Financial Services Australia Limited (see address inside the back cover). If your application does not specify the (s) for investment, we will invest your initial investment wholly in the Cash. However, you may be able to switch your investment from the Cash, as outlined on page 21. Additional investments (ad hoc) After you have become a unitholder in the Investment, additional ad-hoc investments can be made at any time by forwarding a cheque or money order to Attention: Registry Services, State Super Financial Services Australia Limited (see address inside the back cover) or using BPAY. When sending a cheque or money order the following details must be provided: your personal details; the amount of your investment; and the allocation. Registered to BPAY Pty Ltd ABN Alternatively, you can send a cheque with a completed additional application form (available from our offices). BPAY payments can be made via your bank or financial institution. Details of Biller Code(s), together with your Customer Reference Number(s) can be located on SSFS s client website (ssfs.com.au) or by contacting your local regional office. If you wish to change the allocation for future/ additional investments, you will need to complete a Request to Change Allocation Future Contributions/Investments form (available from ssfs.com.au or any of our offices). If you do not specify the (s) for investment, your monies will be invested wholly in the Cash. However, you may be able to switch your investment from the Cash, as outlined on page 20. As a unitholder in the Investment Class A, you can only make additional investments into Class A units of a. Additional investments (Regular Savings Plan) You can arrange to make regular investments into the Investment using the Regular Savings Plan (see page 22). 20 State Super Investment Class A Product Disclosure Statement

21 How to switch and withdraw Switching A switch is the process of redeeming units in a (s), and using the redemption proceeds to purchase units in another (s). Please note that if you switch out all your units from the Cash, any interest which has accrued but has not yet been paid to you will also be switched out. You can switch a minimum amount of $500 in one (or the total of your investment in that, if it is less than $500) to one or more of the other s in the Investment, at any time. You can arrange a switch by completing a switch notification form available from any of our offices or by providing the necessary details in writing to us. As a unitholder in the Investment Class A, you can only switch from Class A units in one to Class A units in another. Prior to switching, you should ensure that you have read the latest PDS for the Investment Class A (and all updates and supplements). The latest PDS (and any updates and supplements) will be provided to you without additional charge upon request from any of our offices (see inside back cover). There is no restriction on the number of times you may switch part or all of your investment. Switching will involve a disposal of units for tax purposes and may have capital gains tax consequences. It is recommended you consult with your financial planner before switching so as to understand the consequences of switching. Withdrawals You can make a withdrawal from a by redeeming your units in that at any time. The minimum amount that can be withdrawn from any one is $500 (or the total of your Account Balance in that, if it is less than $500). This can be done by completing a redemption notification form available from any of our offices. It is recommended that you consult with your financial planner before withdrawing. Should you redeem all units held in the Cash, interest accrued on those units will be paid to you at that time. You are entitled to withdraw your Account Balance at any time. Your Account Balance is calculated by multiplying the number of units held in each by the then prevailing unit price for each and totalling these amounts. You should note however, that the amount received will be dependent on the prevailing unit price at the date the withdrawal is processed. You should allow at least two business days after the processing of your withdrawal for the monies to be credited to your bank, credit union, or building society account. Defaults on withdrawals and switches If you request a withdrawal or switch and you fail to provide us with details of the (s) from which you wish your units to be redeemed, or your request cannot be followed, we will deem that you have requested us to redeem sufficient units in order to satisfy your withdrawal or switch request in the following order: 1. from the Cash (until all funds are exhausted); 2. from the Fixed Interest (until all funds are exhausted); 3. from the Capital Stable (until all funds are exhausted); 4. from the Moderate (until all funds are exhausted); 5. from the Balanced (until all funds are exhausted); 6. from the Growth (until all funds are exhausted); 7. from the Growth Plus (until all funds are exhausted); 8. from the Australian Equities (until all funds are exhausted); and finally 9. from the International Equities. You should be aware that the above order for redeeming units may not be the best suited for your particular circumstances, therefore it is important that you provide us with full withdrawal details. Visit our website or call for further information 21