Our investment options are changing
We’re making changes to our range of investment options to give you greater choice, flexibility and more lower-cost ways to help grow your retirement savings.
We're making some important changes to our range of investment options. The date on which these changes will take effect (Effective Date) is 8 October 2020.1
Investment options we're renaming
Investment options currently available to members:
- Australian Shares will be renamed to Australian Shares (Active)
- International Shares will be renamed to International Shares (Active).
Investment options we're adding
Three new ‘passively invested’ lower-cost investment options:
- Indexed Balanced
- Australian Shares (Indexed)
- International Shares (Indexed).
Investment options we're closing
Two investment options currently available to members:
- Targeted Return
- Indexed Shares.
On the Effective Date, these two options will be closed and funds invested in the options that are closing will automatically be switched to the investment options as set out in the table below.
The switch will also apply to the allocation of future contributions and future pension drawdown payments so that funds allocated to or drawn from the investment options that are closing will be instead allocated to or drawn down from the replacement investment options as set out in the table below:
| Closing option: | Switched to: |
|---|---|
| Targeted Return | 100% to Moderate This more popular option has:
|
| Indexed Shares | 50% to Australian Shares (Indexed) and 50% to International Shares (Indexed) When combined, these two options provide similar exposure to indexed shares with similar levels of risk and similar fees and costs, but with the added advantage of the flexibility to change the proportions of your investments in International and Australian shares. In addition, the new investment options each have their own return objectives, risk labels, investment mixes and investment strategies as well as their own fees and costs. |
1 In the event the Effective Date of 8 October 2020 is delayed for any reason, we will implement the changes as soon as possible, but no later than 30 November 2020. We will let you know should this occur.
More investment options to choose from
After the changes come into effect, we'll have 11 investment options for members to choose from (up from 10):
| OUR INVESTMENT OPTIONS | |||
|---|---|---|---|
| OPTION CATEGORY | BEFORE 8 OCTOBER 2020 | FROM 8 OCTOBER 2020 | WHAT’S CHANGED |
| Pre-mixed options | MySuper Balanced 2 | MySuper Balanced 2 | No change |
| High Growth | High Growth | No change | |
| Targeted Return |
|
Option no longer available | |
|
|
Indexed Balanced | New option available | |
| Moderate | Moderate | No change | |
| Conservative | Conservative | No change | |
| Asset class options | Australian Shares | Australian Shares (Active) | Name change only |
| International Shares | International Shares (Active) | Name change only | |
| Indexed Shares |
|
Option no longer available | |
|
|
Australian Shares (Indexed) | New option available | |
|
|
International Shares (Indexed) | New option available | |
| Property | Property | No change | |
| Cash | Cash | No change | |
2 For pension members the MySuper Balanced option is known as the Balanced option.
Introducing our three new indexed investment options
Available from the Effective Date, these new options give you access to lower-cost Balanced, Australian Shares and International Shares options.
What are indexed options?
Most stock markets, such as the Australian Securities Exchange (ASX), have indices that track their value over time, for example the S&P/ASX 100 is an index made up of the 100 largest companies on the ASX.
Generally, indexed investment options are made up of a mix of investments that are representative of one or more indices and aim to perform in line with market returns. Indexed investment options are available to cover almost every industry sector and asset class, including Australian and international shares, fixed interest and cash. The passive approach of indexed investing involves less time and cost than 'active' investing.
This is different to an actively invested approach we use for some of our other options like MySuper Balanced. With an active investment approach the underlying investments are hand-picked by specialist investment managers which involves more time and cost.
Indexed Balanced
Strategic asset allocation
| ASSET CLASS | ASSET ALLOCATION | RANGE |
| Passive Australian Shares | 35% | 20-50% |
| Passive International Shares | 35% | 20-50% |
| Passive Fixed Interest | 28% | 0-60% |
| Cash | 2% | 0-20% |
Investment objective
Investment strategy
Suggested minimum investment time frame
Expected frequency of negative annual returns in any 20-year period
Risk band (1-7)
Risk label
Investment fee
Indirect cost ratio (ICR)
Australian Shares (Indexed)
Strategic asset allocation
| Asset class | asset allocation |
| Passive Australian Shares | 100% 3 |
Investment objective
Investment strategy
Suggested minimum investment time frame
Expected frequency of negative annual returns in any 20-year period
Risk band (1-7)
Risk label
Investment fee
Indirect cost ratio (ICR)
3 From time to time the investment managers may hold cash.
International Shares (Indexed)
Strategic asset allocation
| Asset class | asset allocation |
| Passive International Shares | 100% 3 |
Investment objective
Investment strategy
Suggested minimum investment time frame
Expected frequency of negative annual returns in any 20-year period
Risk band (1-7)
Risk label
Investment fee
Indirect cost ratio (ICR)
3 From time to time the investment managers may hold cash.
More information about our new range of investment options and the investment options we're renaming will be available in updated versions of our Product Disclosure Statements (incorporating our Investments Guide and Fees and Costs booklet) which will be available to members at lucrf.com.au or by calling 1300 130 780.
Planning on changing your investment option?
Switch before the Effective Date and your selection from existing options will be subject to the changes outlined above on the Effective Date.
This means that if you choose to switch any of your account balance into the Targeted Return or Indexed Shares investment options before the Effective Date, any balance you hold in these investment options will be automatically switched to the different investment options on the Effective Date as set out under the heading 'Investment options we're closing' above.
To invest in any of our new investment options, you will need to wait until after the Effective Date to make a switch request.
For more information about changing investment options read our PDS and Investments Guide.
How do I switch?
There are three ways you can switch your investment options:
- Log in to Members Online any time.
- Complete the Investment Choice Form and return it to us.
- Call us on 1300 130 780 for assistance.
We don't charge any fees or costs for investment switches.
To help understand our investment options and choose how your balance is invested, read our Investment Guide and complete our Investment Profile Questionnaire.
Do you have questions about your investment options?
If you need help you can request a callback from one of our experienced financial advisers at no extra cost to you.
Request a callback1 In the event the Effective Date of 8 October 2020 is delayed for any reason, we will implement the changes as soon as possible, but no later than 30 November 2020. We will let you know should this occur.
Advice about your LUCRF super account is included in your membership fees.
