This option targets to invest approximately 90% in growth assets and 10% in defensive assets.
Investment objective (after fees and taxes over rolling 10-year periods)
To outperform the annual rate of inflation (CPI) by around 3.5% pa.
Suitability
Most suitable for members whose most important consideration is high returns and who are willing to accept a high risk of a negative return in any one year.
Minimum suggested investment timeframe
Normally five years or more.
Standard Risk Measure
Risk Band: 6
Risk Label: High
Risk versus return
This option has a very strong emphasis on growth assets with a view to achieving higher returns and therefore carries more investment risk. The value may vary significantly up or down over the short term. However, high investment returns are generally expected over longer periods. A negative annual return is anticipated on average 4-6 times every 20 years but negative returns may be more or less frequent.
Target Asset Allocation
Managed Volatility Process
The Managed Volatility Process (MVP) is a feature available in the Growth option.
Return
It incurs an additional management fee of 0.25% pa which will impact your net investment returns.
The investment return profile is also modified – returns are expected to be lower in ‘up’ markets but better in ‘down’ markets.
Risk
The MVP is designed to more actively manage risk during periods of extreme market volatility. While the chance of a negative return is similar, the magnitude of the negative return in ‘down’ markets is expected to be smaller.
It aims to stabilise investment volatility and still maintain strong exposure to potential growth cycles.
Target Asset Allocation
The Growth MVP targets to invest 95% of funds according to the target asset allocation of the standard option, and 5% of funds to manage short-term volatility through a futures overlay.