plum super national australia bank group superannuation ... · diversified portfolios that invest...

Plum SuperNational Australia Bank GroupSuperannuation Fund A (Plan)

Investment Menu

The FundIssued by the TrusteePreparation dateMLC Super FundABN 70 732 426 024

NULIS Nominees (Australia) LimitedABN 80 008 515 633AFSL 236465

1 April 2020

This menu gives you information about the investments availablethrough Plum Super.

A financial adviser can help you decide which investment optionsare right for you.

The information in thisdocument forms part ofthe Plum Super - National

4Investing with Plum

5Things to consider before you invest

14Choosing your investment options Australia Bank GroupSuperannuation Fund A(Plan) Product Disclosure

16Your investment options

Statement (PDS), dated 1April 2020. Together withthe Fee Brochure,Insurance Guide and theClaims Guide, thesedocuments should beconsidered before makinga final decision aboutwhether to invest. They areavailable when you log into nabgsf.com.au

This document contains general information only. Before acting on this information, you should consider its appropriateness toyou, having regard to your personal objectives, financial situation and needs. A financial adviser can help you decide if this is theright product for you. For more information please contact us, speak with your financial adviser or go to the online copy of thisdocument on nabgsf.com.au

References to ‘we’, ‘us’ or ‘our’ are references to the Trustee. The Trustee is part of the National Australia Bank (NAB) Group ofCompanies. An investment with the Trustee is not a deposit with, or liability of, and is not guaranteed by, NAB.

The information in this document may change from time to time. Any updates that aren’t materially adverse will be available atnabgsf.com.au. You can obtain a paper copy of any of these changes at no additional cost by contacting us.

This offer is made in Australia in accordance with Australian laws, and your account will be regulated by these laws.

MLC Asset Management Services Limited ABN 38 055 638 474 AFSL 230687 and each investment manager referred to in thisInvestment Menu, and JANA Investment Advisers Pty Ltd ABN 97 006 717 568 AFSL 230693 (as investment consultant to NULIS),have given written consent to be named and quoted in the PDS and this Investment Menu (as applicable), and to the inclusion ofstatements made by them. As at the date of the Investment Menu, these consents have not been withdrawn.

Please read the latest applicable Product Disclosure Statement and any incorporated materials before making any decision abouta product.

3

Contents

http://www.nabgsf.com.au/



We provide a broad rangeof investment options andyou can choose anycombination of these to putyour investment plan intoaction.Our Investment Menu has beendeveloped to suit all levels ofinvestment knowledge and experience.You can choose from a broad range ofinvestment options, includingdiversified portfolios that invest acrossmultiple asset classes, and single-sectoroptions that invest in a single assetclass.

We believe the best way to manage ourportfolios is to employ the skills ofmultiple specialist investmentmanagers. We’ve appointed the NABGroup’s multi-asset managementbusiness, MLC Asset ManagementServices Limited to advise on andmanage our investment options. Ourinvestment experts have extensiveknowledge and experience at designingand managing portfolios using amulti-manager investment approach.

While MLC Asset Management’s namehas changed through time, it’s the sameteam that’s been advising on andmanaging our portfolios for decades.

Investing with usOur portfolios have different investmentobjectives because we know everyonehas different ideas about how theirmoney should be managed.

Our portfolios make sophisticatedinvesting straightforward.

Our investment experts structure ourportfolios to deliver more reliablereturns in many potential marketenvironments. And, as their assessmentof world markets changes, ourportfolios are evolved to manage newrisks and capture new opportunities.

We use specialist investment managersin our portfolios. Our investmentexperts research hundreds ofinvestment managers from around the

world and select the managers theybelieve are the best for our portfolios.Our investment managers may bespecialist in-house managers, externalmanagers or a combination of both.

Importantly, we stay true to theobjectives of our portfolios, so you cankeep on track to meeting your goals.

Selecting investmentoptionsWe’ve appointed JANA InvestmentAdvisers Pty Ltd (JANA) to advise us onour Investment Menu. It is one of theleading investment consultants inAustralia with over 30 years ofexperience and $600 billion of fundsunder advice (as at 31 December 2019).JANA is partly owned by NationalAustralia Bank Limited (NAB).

The Investment Menu is regularlyreviewed by a committee ofexperienced investment professionals.

A number of factors are taken intoconsideration when choosing theinvestment options. These may includethe investment objective, fees, externalresearch ratings and performance, aswell as our ability to efficientlyadminister the investment option. Theselection of options issued bycompanies either wholly or partiallyowned by NAB Group is done on anarm’s-length basis in line with theTrustee’s Conflicts Management Policy.

Investment switchingYou can change your investmentoptions any time. We do not charge afee for you to do this. However, buy-sellspreads may apply.

Delayed and suspendedtransactions We may delay or suspend transactions,for example where an investmentmanager delays or suspends unitpricing, or when there are adversemarket conditions.

We may process withdrawal and switchrequests in instalments over a period oftime and may also suspend processingof withdrawal and switch requests wehave received. In certain circumstanceswe may refuse a request. Whererequests are delayed, suspended orbeing paid in instalments, the unitprices used for transactions will bethose available on the day thetransaction takes effect, rather than theday of the request. In the event that theInvestment Option becomes illiquid, youmay only withdraw your funds inaccordance with any withdrawal offerthat we make. We are not responsiblefor losses that delayed or suspendedtransactions may cause.

Monitoring of frequentswitchingThis product is not appropriate formembers who wish to switch theirinvestments frequently in the pursuit ofshort-term gains.

We monitor all investment options forabnormal transaction activity becausethis sort of activity can have adverseimpacts for other members.

To maintain equity, we have the rightto deal with members who frequentlyswitch by:

delaying, limiting, rejecting orapplying special conditions to futureswitch requestspermanently cancelling membershiprejecting applications to open newaccounts in the Fund, and/orrejecting contributions and rolloversto existing accounts

4

Investing with Plum

Before you invest, there are some thingsyou need to consider, including howmuch risk you're prepared to accept.

This is determined by various factors,including:

your investment goalsthe savings you'll need to reach thesegoalsyour age and how many years youhave to investwhere your other assets are investedthe return you may expect from yourinvestments, andhow comfortable you are withinvestment risk.

Investment riskAll investments come with some risk.Some investment options will havemore risk than others, as it depends onan option’s investment strategy andassets.

The value of an investment with ahigher level of risk will tend to rise andfall more often and by greater amountsthan investments with lower levels ofrisk, ie it’s more volatile.

While it may seem confronting,investment risk is a normal part ofinvesting. Without it you may not getthe returns you need to reach yourinvestment goals. This is known as therisk/return trade-off.

Many factors influence an investment’svalue. These include, but aren’t limitedto:

market sentimentchanges in inflationgrowth and contraction in Australianand overseas economieschanges in interest ratesdefaults on loanscompany specific issuesliquidity (the ability to buy or sellinvestments when you want to)changes in the value of theAustralian dollarinvestments and withdrawals byother investors

changes in Australian and overseaslaws, anda counterparty not meeting itsobligations eg when buyingsecurities, the seller may not deliveron the contract by failing to providethe securities.

VolatilityPeriods of volatility can be unsettlingand may occur regularly. You may findit reassuring to know that ofteninvestments that produce higher returnsand growth over long periods tend tobe more volatile in the short term.

By accepting that volatility will occur,you’ll be better able to manage yourreaction to short-term movements. Thiswill help you stay true to your long-terminvestment strategy.

When choosing your investment, it’simportant to understand that:

its value and returns will vary overtimeassets with higher long-term returnpotential usually have higher levelsof short-term riskreturns aren’t guaranteed and youmay lose moneyfuture returns will differ from pastreturns, andyour future super savings (includingcontributions and returns) may notbe enough to provide sufficiently foryour retirement.

Diversify to reduce volatilityand other risksDiversification – investing in a range ofinvestments – is a sound way to reducethe short-term volatility of a portfolio’sreturns. That’s because different typesof investments perform well in differenttimes and circumstances. When someare providing good returns, others maynot be.

Portfolios can be diversified acrossdifferent asset classes, industries,securities and countries, as well asacross investment managers withdifferent approaches.

The more you diversify, the less impactany one investment can have on youroverall returns.

One of the most effective ways ofreducing volatility is to diversify acrossa range of asset classes.

Diversification across asset classesis just one way of managingrisk. Our multi-asset portfoliosdiversify across asset classes andinvestment managers. Please referto 'Our approach to investing' in the'Choosing your investment options'section for more information.

A financial adviser can help youclarify goals and assist with creatinga financial plan which helps youmanage risk and consider issuessuch as:

how many years you have toinvestthe savings you'll need to reachyour goalsthe return you may expect fromyour investments, andhow comfortable you are withvolatility.

5

Things toconsider beforeyou invest

Types of assetsAsset classes are generally grouped as defensive, growth or alternatives based on their different characteristics.

Multi-asset portfolios are usually invested across these groups because each has different return and volatility characteristics.For example, defensive assets may help to provide returns in a portfolio when share markets are weak. On the other hand,growth assets may be included in a portfolio because of their potential to produce higher returns than cash in the long term.

However, in some market conditions, all types of assets may move in the same direction, delivering low or negative returnsat the same time.

The main differences between these types of assets are:

AlternativesGrowthDefensiveA very diverse group of assets andstrategies. Some examples includeprivate assets and hedge funds.

Shares, unlisted property and listedproperty securities.

Cash and fixed income securities.Asset classesincluded

Because alternatives are diverse,they may be included in defensiveor growth assets.To provide returns that aren’tstrongly linked with those ofmainstream assets. They may beincluded for their defensive orgrowth characteristics.

To provide long-term capitalgrowth.

To stabilise returns.How they aregenerally used

Expected to produce returns andvolatility that aren’t strongly linkedto mainstream assets such as

Expected to produce higherreturns, and be more volatile, thandefensive assets over the long term.

Expected to produce lower returns,and be less volatile, than growthassets over the long term.

Risk and returncharacteristics

shares. Risk and returncharacteristics of differentalternative investments can varysignificantly.

6


Asset ClassesAsset classes are groups of similar typesof investments. Each class has its risksand benefits, and goes through its ownmarket cycle.

A market cycle can take a couple ofyears or many years as prices rise, peak,fall and stabilise. Through investing forthe long term, at least through a wholemarket cycle, you can improve yourchance of benefiting from a period ofstrong returns and growth to offsetperiods of weakness.

The illustration below shows indicativereturns and volatility for the main assetclasses over a whole market cycle. Buteach market cycle is different, sounfortunately it isn’t possible toaccurately predict asset class returns ortheir volatility. Depending on theconditions at the time, actual returnscould be significantly different fromthose shown.

Here are the main asset class risks andbenefits.

Cash

Cash is generally a low risk investment.

Things to consider:

Cash is often included in a portfolioto meet liquidity needs and stabilisereturns.The return is typically all income andis referred to as interest or yield.Cash is usually the least volatile typeof investment. It also tends to havethe lowest return over a marketcycle.The market value tends not tochange. However, when you investin cash, you’re effectively lendingmoney to businesses or governmentsthat could default on the loans,resulting in a loss on yourinvestment.Many cash funds invest in fixedincome securities that have a veryshort term until maturity.

Indicative volatility

Ind

icat

ive

retu

rns

Indicative returns and volatility over a market cycle

Higher

Lower Higher

Cash

Private assets

Shares

Property

Fixed income

Defensive alternatives

Growth alternatives

� A146110-0819Source: MLC Asset Management Services Limited

7

Fixed income (including term deposits)

When investing in fixed income you’reeffectively lending money to businessesor governments. Bonds are a commonform of fixed income security. Fixedincome is also known as fixed interest.

Things to consider:

Fixed income securities are usuallyincluded in a portfolio for theirrelatively stable returncharacteristics.Returns typically comprise interestand changes in the market value ofthe fixed income security. Fixedincome securities’ values tend tomove in opposite directions tointerest rates. So when interest ratesrise, fixed income securities’ valuestend to fall and when interest ratesfall, values can rise. Short-term fixedincome securities are generally lesssensitive to interest rate changesthan longer-term securities.While income from fixed incomesecurities usually stabilises returns,falls in their market value may resultin a loss on your investment. Marketvalues may fall due to concern aboutdefaults on loans or an increase ininterest rates. When interest ratesare low, the risk of rates rising andmarket values falling, is greatest.There are different types of fixedincome securities and these will havedifferent returns and volatility.Investing in fixed income securitiesoutside Australia may expose yourportfolio to movements in exchangerates.

Property

Access to property may be throughtrusts listed on a securities exchange(known as listed property securities orReal Estate Investment Trusts), unlistedproperty trusts, or direct ownership.Investments may include retail,commercial, industrial and residentialproperties in Australia and around theworld.

Things to consider:

Property is usually included in aportfolio for its growthcharacteristics.Returns typically comprise income(such as rental income) and changesin value.Returns are driven by many factorsincluding the economic environmentin various countries.Returns from property can bevolatile. Because listed propertysecurities are listed on an exchange,their prices constantly reflect themarket’s changing view of theirproperty values. Unlisted propertyvalues are more difficult todetermine and usually involve aconsiderable time lag. As a result ofthese differences in valuationfrequency, listed property securities’returns may appear to be morevolatile than unlisted property.Investments in listed propertysecurities generally provide investorsgreater diversification acrosscountries, sectors and propertiesthan investments that aren’t listed.And the global listed propertysecurities market is even morediversified than the Australianmarket.Unlisted property is illiquid whichmakes it more difficult for aninvestment manager to buy or sell. Investing outside Australia mayexpose your portfolio to movementsin exchange rates.

Australian shares

This asset class consists of investmentsin companies listed on the AustralianSecurities Exchange (and otherregulated exchanges). Shares are alsoknown as equities.

Things to consider:

Australian shares can be volatile andare usually included in a portfolio fortheir growth characteristics.The Australian share market is lessdiversified than the global marketbecause Australia is currentlydominated by a few industries suchas Financials and Resources.Returns usually comprise dividendincome and changes in share prices.Dividends may have the benefit oftax credits attached to them (knownas franking or imputation credits).Returns are driven by many factorsincluding the performance of theAustralian economy.Companies listed on the Australianshare market can be grouped assmall, medium and largecapitalisation (cap) based on factorsincluding the total market value oftheir listed shares and liquidity.Investors in small cap companiesgenerally experience greater pricevolatility than shares in large capcompanies because small capcompanies trade less frequently andin lower volumes. They may alsounderperform large cap companiesfor many years.

8


Global shares

Global shares consist of investments incompanies listed on securitiesexchanges around the world.

Things to consider:

Global shares can be volatile and areusually included in a portfolio fortheir growth characteristics.The number of potential investmentsis far greater than in Australianshares.Returns usually comprise dividendincome and changes in share prices.Returns are driven by many factorsincluding the economic environmentin various countries.When you invest globally, you’re lessexposed to the risks associated withinvesting in just one economy.Investing outside Australia meansyou’re exposed to movements inexchange rates.

Alternatives

These are a very diverse group of assets.Some examples include private assets,hedge funds, real return strategies,gold, listed infrastructure securities andunlisted infrastructure.

Things to consider:

Because alternatives are diverse, theymay be included in a portfolio fortheir defensive or growthcharacteristics.Alternative investments are usuallyincluded in portfolios to increasediversification and provide returnsthat aren’t strongly linked with theperformance of mainstream assets.Investment managers includealternative investments in a portfoliobecause they generally expect thereturn and diversification benefits ofalternative investments to outweighthe higher costs often associatedwith them.Some alternative strategies aremanaged to deliver a targetedoutcome. For example, real returnstrategies aim to produce returnsexceeding increases in the costs ofliving (ie inflation).For some alternatives, such as hedgefunds, derivatives may be usedextensively and it can be less obviouswhich assets you’re investing incompared to other asset classes.Some alternative investments areilliquid, which makes them difficultto buy or sell.To access alternative investments yougenerally need to invest in amanaged fund that, in turn, investsin alternatives.Because most alternative investmentsaren’t listed on an exchange,determining their value for a fund’sunit price can be difficult and mayinvolve a considerable time lag.Alternatives invested outsideAustralia may expose your portfolioto movements in exchange rates.

Private assets

Investing in private assets gives yourportfolio exposure to assets that aren’ttraded on listed exchanges.

An example of this is an investment ina privately owned business.

Things to consider:

Private assets are alternative assetsthat are usually included in aportfolio for their growthcharacteristics.Returns are driven by many factorsincluding the economic environmentin different countries.Private assets can be volatile and cantake years to earn a positive return.Private assets may be included in aportfolio to provide higher returnsthan share markets in the long run,and to increase diversification.Private assets are illiquid whichmakes them difficult to buy or sell.To access private assets you generallyneed to invest in a managed fundthat invests in private assets.Because private assets aren’t listedon an exchange, determining theirvalue for a fund’s unit price can bedifficult and may involve aconsiderable time lag.

9

Investment approachesInvestment managers have differentapproaches to selecting investments,which invariably results in differentreturns. No single investment approachis guaranteed to outperform all othersin all market conditions.

There are generally two broadapproaches: passive and activemanagement.

Passive management

Passive, or index, managers chooseinvestments to form a portfolio whichwill deliver a return that closely tracksa market benchmark (or index). Passivemanagers tend to have lower costsbecause they don’t require extensiveresources to select investments.

Active management

Active managers select investments theybelieve, based on research, will performbetter than a market benchmark overthe long term.

They buy or sell investments when theirmarket outlook alters or investmentinsights change.

The degree of active managementaffects returns. Less active managerstake small positions away from themarket benchmark and more activemanagers take larger positions.Generally, the larger an investmentmanager's positions, the more theirreturns will differ from the benchmark.

Active managers have differentinvestment styles that also affect theirreturns. Some common investmentstyles are:

Bottom-up – focuses on forecastingreturns for individual companies,rather than the market as a whole.Top-down – focuses on forecastingbroad macroeconomic trends andtheir effect on the market, ratherthan returns for individualcompanies.Growth – focuses on companies theyexpect will have strong earningsgrowth.

Value – focuses on companies theybelieve are undervalued (their pricedoesn’t reflect earning potential).Income – focuses on generating aregular income stream throughselecting companies, trusts and othersecurities they believe will deliverincome, or through using derivativesand other strategies.Core – aims to produce competitivereturns in all periods.

Ethical investing

We have an Environment, Social andGovernance Risk Management Policy(ESG Policy), which applies to NAB StaffMySuper. The ESG Policy is availableon nabgsf.com.au

For other investment options,investment managers may take intoaccount labour standards,environmental, social or ethicalconsiderations when making decisionsto buy or sell investments, however wedon’t require them to. The Trustee doesnot actively contemplate these factorswhen selecting an investment optionfor inclusion on the Investment Menu.

However, where an investment optionis marketed by the investment manageras a ‘socially responsible’ investment,the Trustee considers whether theinvestment option meets the LonsecEthical SRI Classification before offeringthe option to members. Lonsec assesseseach option’s investment process andprovides a Responsible InvestmentClassification of ‘Light’, ‘Moderate’ or‘Substantial’ for each investmentoption’s depth of responsibleinvestment.

Investment techniquesOur investment experts and investmentmanagers may use different investmenttechniques that can change the valueof an investment.

Some of the main investmenttechniques are explained below.

Derivatives

Derivatives may be used in any of theinvestment options.

Derivatives are contracts that have avalue derived from another source suchas an asset, market index or interestrate. There are many types of derivativesincluding swaps, options and futures.They are a common tool used tomanage risk or improve returns.

Some derivatives allow investmentmanagers to earn large returns fromsmall movements in the underlyingasset’s price. However, they can loselarge amounts if the price movement inthe underlying asset is unfavourable.

Risks particular to derivatives includethe risk that the value of a derivativemay not move in line with theunderlying asset, the risk thatcounterparties to the derivative may notbe able to meet payment obligationsand the risk that a particular derivativemay be difficult or costly to trade.

The Trustee’s derivatives policy permitsthe use of derivatives where consistentwith an investment option’s objective,risk profile, disclosure and governingdocuments, legislative and regulatoryrequirements. They may be used for:

hedgingefficient portfolio management, andinvestment return generation.

Further information on the Trustee’sderivatives policy is availableat nabgsf.com.au/derivatives-policy

10



http://www.nabgsf.com.au/derivatives-policy

Currency management

If an investment manager invests inassets in other countries, its returns inAustralian dollars will be affected bymovements in exchange rates (as wellas changes in the value of the assets).

A manager of international assets maychoose to protect Australian investorsagainst movements in foreign currency.This is known as ‘hedging’.Alternatively, the manager may chooseto keep the assets exposed to foreigncurrency movements, or ‘unhedged’.

Returns from exposure to foreigncurrency can increase diversification ina portfolio.

Short selling

If an investment manager uses shortselling extensively for a particularinvestment option, we’ve made a noteof it in their investment option profile.

Short selling is used by an investmentmanager when it has a view that anasset’s price will fall. The managerborrows the asset from a lender, usuallya broker, and sells it with the intentionof buying it back at a lower price. If allgoes to plan, a profit is made. The keyrisk of short selling is that, if the priceof the asset increases, the loss could besignificant.

11

Considering an investment optionThe information below explains terms used in the profiles for each investment option in the Investment Menu.

ExplanationTerms used in investmentoption profiles

Describes what the investment option aims to achieve over a certain timeframe. Most investmentoptions aim to produce returns that are comparable to a benchmark (see below for moreinformation on benchmarks). The returns of an investment option should be judged against itsobjective.

Investment objective

The investment objective outlines whether returns used to judge an investment option's successshould have fees and taxes included. Investment objectives may consider fees and taxes in thefollowing ways:

‘After fees and tax’ – when calculating performance against the investment objective, theinvestment fee, indirect cost ratio, and tax on investment earnings have already been deductedfrom the return. The administration fees, other costs, and other taxes have not been deducted. 'Before fees and tax' – when calculating performance against the investment objective, thefees, tax, and costs (other than the indirect cost ratio) have not been deducted from the return.

More information on fees and how they are deducted is available from section 6 and 7 of the PDS.

Describes how the investment option is managed.How the investment optionis managed

Suggests why you may be interested in investing in this particular investment option. Your ownpersonal objectives and circumstances will also affect your decision.

The investment option maybe suited to you if...

Investment managers suggest minimum timeframes for each investment option. Investing for theminimum suggested time or longer improves your chances of achieving a positive return. However,investing for the minimum time doesn’t guarantee a positive return outcome because every marketcycle is different. Your personal circumstances should determine how long you hold an investment.

Minimum suggestedtime to invest

Provides an indication of the proportion of an investment option that’s invested in each asset class.Asset allocations are displayed in various ways in the Investment Menu:

Asset allocations

Where a benchmark asset allocation is provided, the investment option’s assets usually moveabove and below the percentage allocations shown.Asset allocation ranges are the lowest and highest weightings the investment manager aimsto invest in each asset class. Changes in asset values, which may be due to market movements,can result in an asset allocation temporarily moving outside these ranges.

Benchmarks are usually market indices that are publicly available. Shares are often benchmarkedagainst a share market index and fixed income against a fixed income market index. Otherbenchmarks can be based on particular industries (eg mining), company size (eg small caps) orthe wider market (eg S&P/ASX 200 or the MSCI World Index). Benchmarks for multi-asset portfoliosmay be:

Benchmark

made up of a combination of market indices weighted according to the asset allocation(commonly known as composite benchmarks), ora single measure, such as inflation. A common index of inflation, which is the rise in the costof living, is the Consumer Price Index (CPI).

When comparing returns to a benchmark you should consider:

whether the investment option’s return is calculated before or after fees and tax are deductedthe period over which the return should be measured, andthat an investment option is unlikely to achieve its objective in all market environments.

12


ExplanationTerms used in investmentoption profiles

We use the Standard Risk Measure (SRM) to help you compare investment risk across the investmentoptions offered. The SRM is based on industry guidance and is the estimated number of negativeannual returns over any 20 year period. The SRM is not a complete assessment of investment risk,for instance it doesn't:

Standard Risk Measure(estimated number ofnegative annual returns)

detail the size a negative return could be or the potential for a positive return to be less thana member requires to meet their objectivescapture the risk of the investment manager not meeting its investment objective, ortake into account the impact of administration fees and tax, which would increase the chanceof a negative return.

Members should still ensure they are comfortable with the risks and potential losses associatedwith their chosen investment. For information on how the SRM is calculated, goto nabgsf.com.au/srm

Estimated number of negative annual returns in any20 year periodRisk labelRisk

bandLess than 0.5Very low1

0.5 to less than 1Low21 to less than 2Low to medium32 to less than 3Medium43 to less than 4Medium to high54 to less than 6High6

6 or greaterVery high7

Shows the costs of investing in each investment option, including investment fees, buy-sell spreads,and where applicable, indirect costs (including performance related costs), transaction costs,borrowing costs and property operating costs. For new investment options, the estimated indirect

Fees and costs

cost ratio reflects the Trustee’s reasonable estimate at the date of this PDS of costs that’ll applyfor the current financial year. Except for new investment options, the indirect costs (includingperformance related costs), transaction costs, borrowing costs and property operating costs arebased on costs incurred for the 12 months to 30 June 2019 and includes estimates where informationwas unavailable at the date this PDS was issued. Please note, past costs are not a reliable indicatorof future indirect costs.The buy-sell spread for each investment option is accurate as at 23 March 2020. The buy-sell spreadsmay vary daily and in certain circumstances, increase significantly. We recommend that you regularlycheck the current buy-sell spreads of an investment option available by logging into your accountat nabgsf.com.au

Buy-sell spread

13

http://www.nabgsf.com.au/srm


NAB Staff MySuperNAB Staff MySuper is an activelymanaged multi-asset investment optiondesigned to meet the needs of defaultmembers of the Fund. NAB StaffMySuper is broadly diversified acrossasset classes, across investmentmanagers and within asset classes.

If you don’t make a choice, your supermoney will go into NAB Staff MySuper.Or, you can choose an investmentoption from one of the following‘options’ which are designed to suitdifferent investor knowledge levels anddesire for involvement.

Diversified optionsThere is a range of actively manageddiversified investment options, so youcan select an expected risk and returnprofile to meet your needs.

At the lower end of the risk and returnpotential is ‘Capital Stable’ which investsmainly in defensive assets such as fixedinterest and cash. At the higher end ofthe risk and return potential is ‘HighGrowth’, which invests mainly in growthassets such as shares.

Sector - specific optionsThere is a range of single-sectorinvestment options available.Single-sector investment options caterfor people looking for an asset classsolution.

We also offer the Cash Option whichinvests in deposits with banks and othercomparable securities.

You should have some understandingof investments, including the differencebetween the main asset classes beforeselecting an investment option in thispath.

You should carefully consider therisks of investing your entireaccount balance in a single assetclass investment option andwhether this represents adequatediversification.For more information, refer to the'Diversify to reduce volatility andother risks' section of thisInvestment Menu.

14

Choosing yourinvestment options

Our approach to investingFor over 35 years our investmentexperts have been designing portfoliosusing a multi-manager approach, tohelp investors achieve their goals.

The four key aspects of this investmentapproach are:

1. Portfolio designOur multi-asset portfolios focus on whataffects investor outcomes the most —asset allocation.

Each asset class has its own risk andreturn characteristics. Money isallocated between asset classes basedon the following beliefs:

• Risk can’t be avoided but can bemanaged

To manage our portfolios’ risk indifferent environments, our investmentexperts consider how economic andmarket conditions might unfold. Theinsights from this analysis are used towork out the combination of assetclasses that they believe will bestachieve a portfolio’s objective.

This helps us prepare our portfolios forfuture market ups and downs.

• Risks and returns vary through time

Analysis of how economic and marketconditions might develop shows ourinvestment experts how the potentialrisks and returns of each asset classcould change over the next three toseven years.

With this information, our portfolios’asset allocations are adjusted to reducetheir risk or improve their returnpotential.

• Diversification matters

Asset classes perform differently indifferent market conditions.

Investing in many asset classes helpssmooth out the overall portfolios'returns, as asset class ups and downscan offset one another.

2. Managing the portfolioOur portfolios have different investmentobjectives. That’s why our investmentexperts select a different mix of assetsand investment managers for each.

The investment managers may bespecialist in-house managers, externalmanagers or a combination of both.

Our investment experts researchhundreds of investment managers fromaround the world and select themanagers they believe are the best forour portfolios.

They are then combined in ourportfolios so they complement eachother.

This multi-manager approach helps toreduce risk and deliver more consistentreturns.

You can find out about our currentinvestment managers by logging into nabgsf.com.au

3. Ongoing reviewTo make sure our portfolios are workinghard for investors, our investmentexperts continuously review and activelymanage them.

This includes adjusting the assetallocation, investment strategies andmanagers.

This may be because our investmentexperts' assessment of the futuremarket environment has altered orbecause they've found new ways tobalance risk and return in the portfolios.

4. Portfolio implementationWe deliver better returns by avoidingunnecessary costs. Our investmentexperts help us do this by carefullymanaging cash flows, tax and changesin our portfolios.

15


NAB Staff MySuperTo outperform inflation, measured by the Consumer Price Index, plus 3% pa, afterinvestment fees and taxes, over rolling 10 year periods.


Aims to invest proportionately more in growth assets than defensive assets to achievemedium-to-high long-term returns, with moderate to high volatility.

How the investment option ismanaged

The investment option may besuited to you if...

you want higher returns over the longer-term, and you understand and accept there can be moderate to high fluctuations in the value ofyour investment.

6 yearsMinimum suggested time to invest

Asset class Ranges (%)

Cash 5%Fixed income 12%Defensive alternatives and other

7%

Growth alternatives and other

8%

Property 10%Global shares 17%Global shares (hedged) 8%Australian shares 28%Private assets 5%

Defensive assets 24% 15-45%Growth assets 76% 55-85%

Benchmark asset allocation (%)

Benchmark asset allocationand ranges

The asset allocation will move aroundthe benchmark asset allocation, whileremaining within the ranges fordefensive and growth assets.

The benchmark asset allocation andranges may change over time.

A combination of market indices, weighted according to the benchmark asset allocationBenchmark

5 - Medium to high (between 3 and 4 years in 20 years)Standard Risk Measure(estimated number of negativeannual returns)

0.63% pa of your balance in this investment option.Investment fee1

Entry/Exit 0.00%/0.00% of any amount moved in or out of this investment option.Buy-sell spreads

AmountAll costs below are calculated basedon your balance in this investmentoption.

0.29% paThis is made up of:Estimated performance related costs (0.13% pa)Estimated other indirect costs (0.16% pa)

Estimated Indirect Cost Ratio (ICR)1

0.09% paEstimated Net transaction costs1 and 2

These are the transaction costs thathave not been recovered by a buy-sellspread or have not been included inthe ICR above.

0.17% paEstimated Borrowing (gearing)costs1

0.14% paEstimated Property operating costs1

1 This amount reduces the net return on the investment option. Please refer to the PDS and Fee Brochure for further informationabout these fees and costs, including how they are calculated.2 The estimated Gross transaction cost for the financial year to 30 June 2019 is 0.18% pa. Any difference between this amountand the Net transaction cost in the table above is due to amounts recovered by a buy/sell spread or amounts included in theICR.

16

Your investmentoptions

Diversified options

Capital StableTo outperform inflation, measured by the Consumer Price Index, plus 2% pa, after investmentfees and taxes, over rolling 5 year periods.


This portfolio is designed to provide investors with a diversified portfolio that is weightedtowards the traditionally more stable asset classes of cash and fixed income.

How the investment option ismanagedThe investment option may besuited to you if...

you want to invest in an actively managed portfolio with a bias to defensive assets, withsome exposure to growth assets, andpreserving your capital is an important but not overriding concern.

3 yearsMinimum suggested time toinvest



6%


6%





The asset allocation will movearound the benchmark assetallocation, while remainingwithin the ranges for defensiveand growth assets.

The benchmark asset allocationand ranges may change overtime.


3 - Low to medium (between 1 and 2 years in 20 years)Standard Risk Measure(estimated number of negativeannual returns)



AmountAll costs below are calculatedbased on your balance in thisinvestment option.


Estimated Indirect Cost Ratio(ICR)1

0.12% paEstimated Net transactioncosts1 and 2

These are the transaction coststhat have not been recovered bya buy-sell spread or have notbeen included in the ICR above.


0.12% paEstimated Property operatingcosts1


17

BalancedTo outperform inflation, measured by the Consumer Price Index, plus 2.5% pa, after investmentfees and taxes, over rolling 10 year periods.


This portfolio is designed to provide investors with a diversified portfolio that is approximatelyequally mixed between the traditionally more stable asset classes of cash and fixed incomeand those assets which have traditionally provided higher levels of overall return, namelyproperty and shares.



you want to invest in an approximately equal mix of defensive and growth assets, andyou want a portfolio with bias to long-term capital growth potential and can toleratemoderate changes in value.




6%


7%








4 - Medium (between 2 and 3 years in 20 years)Standard Risk Measure(estimated number of negativeannual returns)











18

GrowthTo outperform inflation, measured by the Consumer Price Index, plus 3% pa, after investmentfees and taxes, over rolling 10 year periods.


The portfolio is designed to provide investors with a diversified portfolio that is weightedtowards asset classes which have traditionally provided a higher level of overall return, namelyproperty and shares.



you want to invest with a strong bias to growth assets, and you want a portfolio with a strong bias towards long-term capital growth potential and cantolerate large changes in value.




7%


8%








5 - Medium to high (between 3 and 4 years in 20 years)Standard Risk Measure(estimated number of negativeannual returns)











19

High GrowthTo outperform inflation, measured by the Consumer Price Index, plus 4% pa, after investmentfees and taxes, over rolling 10 year periods.


The portfolio is designed to provide investors with long-term growth through a diversifiedproperty and share portfolio.

How the investment option ismanagedThe investment option may besuited to you if...

you want to invest with a strong bias to growth assets, andyou want a portfolio with a strong bias towards long-term capital growth potential and cantolerate large changes in value.



Defensive alternatives and other

0%


4%








6 - High (between 4 and 6 years in 20 years)Standard Risk Measure(estimated number of negativeannual returns)











20

Sector-Specific options

Cash PlusTo outperform the Bloomberg AusBond Bank Bill Index, before fees and taxes, over rolling 1year periods.


The fund is actively managed and focuses on investing in securities with:How the investment option ismanaged

high credit ratings, andlow sensitivity to changes in interest rates (eg securities with floating rather than fixedinterest rates, and with maturity terms of less than one year).

In normal market conditions these securities are liquid, but in adverse market environmentsthey may be less liquid and have more price volatility, which could potentially reduce the valueof your investment.


you want to invest in an actively managed low risk portfolio that aims to provide higherreturns than standard cash options, and you’re willing to accept the fund’s risks are higher than standard cash options.

6 monthsMinimum suggested time toinvest

100% Cash and fixed incomeBenchmark asset allocation

The benchmark asset allocationmay change over time.

Bloomberg AusBond Bank Bill IndexBenchmark

1 - Very low (less than 1 year in 20 years)Standard Risk Measure(estimated number of negativeannual returns)











21

Fixed InterestTo outperform the Reserve Bank of Australia Cash Rate by 1% pa, after fees and taxes, overrolling 10 year periods.


The option is diversified across different types of fixed income securities in Australia and aroundthe world. The securities are predominately investment grade and typically longer dated. Theaverage term to maturity is normally in the range of three to six years. Foreign currencyexposures will be substantially hedged to the Australian dollar. As a result of capital restructuresof bond issuers, the option may have an incidental exposure to shares from time to time.



you want to invest in a fixed income fund that’s actively managed and diversified acrossinvestment managers, countries, bond sectors and securities.


50% Australian fixed incomeBenchmark asset allocation

50% Global fixed incomeThe benchmark asset allocationmay change over time.

50% Bloomberg Ausbond Composite Bond (All Maturities) IndexBenchmark

50% Bloomberg Barclays Global Aggregate Total Return Index (Hedged into Australian dollars)

3 - Low to medium (between 1 and 2 years in 20 years)Standard Risk Measure(estimated number of negativeannual returns)











22

Australian SharesTo outperform the S&P/ASX 300 Total Return Index, before fees and taxes, over rolling 5 yearperiods.


The option invests primarily in companies listed (or expected to be listed) on the AustralianSecurities Exchange (and other regulated exchanges), and is typically diversified across majorlisted industry groups. The option may have small exposure to companies listed outside ofAustralia from time to time.



you want to invest in an actively managed Australian share fund that’s diversified acrossinvestment managers, industries and companies.


100% Australian sharesBenchmark asset allocation


S&P/ASX 300 Total Return IndexBenchmark7 - Very high (more than 6 years in 20 years)Standard Risk Measure

(estimated number of negativeannual returns)











23

Overseas SharesTo outperform the composite benchmark of 70% MSCI All Country World Gross Index and 30%MSCI All Country World Gross Index hedged into Australian dollars), before fees and taxes,over rolling 5 year periods.


The option invests primarily in companies listed (or expected to be listed) on share marketsanywhere around the world, and is typically diversified across major listed industry groups.Foreign currency exposures will generally not be hedged to the Australian dollar.



you want to invest in an actively managed global share portfolio that's diversified acrossinvestment managers, countries (developed and emerging), industries and companies, andyou're comfortable having foreign currency exposure.


100% Global sharesBenchmark asset allocation


70% MSCI All Country World Gross IndexBenchmark

30% MSCI All Country World Gross Index (hedged into Australian dollars)

6 - High (between 4 and 6 years in 20 years)Standard Risk Measure(estimated number of negativeannual returns)











24

For more information call us fromanywhere in Australia on1300 55 7586 or contact yourfinancial adviser.

Postal address

Plum SuperGPO Box 63Melbourne VIC 3001

Registered office

Ground Floor, MLC Building105–153 Miller StreetNorth Sydney NSW 2060

nabgsf.com.au

OBJA119981-0420


plum super national australia bank group superannuation ... · diversified portfolios that invest...

Documents