Hostplus Self-Managed Invest - Additional Information brochure 15 February 2021
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Hostplus Self-Managed Invest. Additional Information brochure 15 February 2021
Contents Hostplus
Self-Managed Invest
1. Hostplus Self-Managed Invest 2 Managing your investments in
Hostplus Self-Managed Invest.
2. Investments and risks 6
Online access
3. How we invest your money 12 All functions for your account, including transactions and
administrative requests, are conducted online at
4. Fees and costs 16 hostplus.com.au/smi where you can:
· Join Hostplus SMI
5. Other important information 21
· make additional investments
6. Glossary 23 · make investment switches and withdrawals
· obtain a summary of your investment allocation including
unit prices and current values
Hostplus Self-Managed Invest (SMI) is issued by Host-Plus
Pty Limited ABN 79 008 634 704, AFSL 244392 in its capacity as · review your transaction history
the Trustee of the Hostplus Pooled Superannuation Trust (PST)
ABN 13 140 019 340. · generate reports and view past statements, and
The information in this document forms part of Hostplus · view and update your details
SMI Product Disclosure Statement (PDS) dated 15 February
2021 and should be read in conjunction with the PDS. It contains Upon accepting your application to invest in Hostplus SMI you
further information about investments, fees and costs. will receive an investor welcome email, including a unique user ID.
We may update this document as required according to changes This will be followed by an email confirming your temporary password
to Hostplus SMI, the Trust Deed and the relevant law. Updates will
which you will be required to change when you first log in.
be available at hostplus.com.au/smi
The investor welcome email and access will be issued to
1389.4 11/20 ISS11 each nominated director/trustee on the investment as well
as any authorised representative and their delegates and/or
representatives.
Transaction authority.
When you invest in Hostplus SMI you will be able to nominate
multiple Account Authorities to act on behalf of the investment.
For example the primary trustee, an authorised representative
or your financial adviser, their delegates and/or representatives.
Your nominated Account Authorities will be granted the approved
level of access so they can keep up to date with the investment.
You can request to change your nominated Account Authorities
at any time. Forms and more information are available from
hostplus.com.au/smi
3
How to transact on your Hostplus Self-Managed Invest investment.
Your request Important Things to note
info
Opening a Hostplus SMI account
Eligible investors or an authorised $10,000 For authentication and Anti Money Laundering (AML)/Counter-
representative, their delegates and/or Terrorism Financing (CTF) purposes, investors and nominated
representatives can apply for Hostplus SMI authorised financial adviser(s) are required to provide the following
via hostplus.com.au/smi or seek assistance evidence at the time of application:
from the SMI service team at 1300 350 819. · identification for each named director/trustee;
The minimum initial investment is $10,000. · evidence of fund compliance;
Applications received after 2pm AEST will · if applicable, evidence and identification of adviser nomination
be considered as having been received the (refer to below section ‘Appointment of Adviser’. This may include
following business day. but not be limited to:
Once your application is verified and funds · Full name of the adviser(s) [if an organisation];
have been received, your investment will
be valued according to the last known unit · Full name of the adviser organisation (if applicable) ;
price for the relevant investment options. · Adviser’s ABN (if applicable);
The following payment methods are · Licence number applicable to the adviser; and
available to make investments into · Full business address (not a PO Box) of the adviser(s).
Hostplus SMI: An application will be considered ‘verified’, once all initial investment
application evidence required by the Trustee is reviewed and confirmed.
Biller Code: 266684 Initial funds are required within 3 business days of your verified
Ref: < > investment application. Should funds not be received by this time
A personalised reference number will be your application will be rejected. We will contact you in such an event
provided to you at the completion of your to provide assistance.
SMI application. Investors are required to nominate their preferred investment
Electronic Funds Transfer (EFT) allocation and allocate assets according to their superannuation
Account Name: phase (accumulation or pension) for their application to proceed.
Hostplus PST – Self-Managed Invest No default investment option applies.
BSB: 242 000
Account Number: 217071003 No maximum investment applies. The Trustee however reserves the
right to decline any application for investment, at its absolute discretion.
Appointment of an authorised representative
You can appoint an authorised You can make a nomination via your initial application or via the
representative to manage your account. investor portal at hostplus.com.au/smi or by completing an
An appointment can be made to grant your Appointment of Adviser form available from the Hostplus SMI
authorised representative, their delegates service team on 1300 350 819. You can appoint, change or revoke
and/or representatives ‘information-only’ your adviser at a later time.
access or ‘full transaction’ access as a Please note in the event of revoking your nominated adviser,
nominated Account Authority to act on the authority may remain in place for up to 3 business days after
your behalf. the Trustee receives a notice of revocation via email or phone.
Making additional investments
You can add to your investment at any $5,000 Investors are required to nominate their preferred investment
time via the online investor portal. allocation and allocate assets according to their superannuation
The minimum additional investment is $5,000 phase (accumulation or pension) for the additional investment to
per investment option, noting the ongoing be accepted. No default investment option applies.
balance requirement of $5,000 per option. Applications will be valued according to the effective date of your
Transaction requests must be received request provided funds have been received by us the following
before 2pm AEST. Applications received business day. Should funds not be received by this time, your
before this cut-off time will be processed request will be rejected.
at the next determined application price. No maximum investment applies. The Trustee however reserves the
This is provided application monies are right to decline any application for investment, in its absolute discretion.
received as cleared funds overnight. You should refer to the current PDS available from the Hostplus SMI
Applications received after 2pm AEST website hostplus.com.au/smi or by the Hostplus SMI Service team on
will be processed at the application price 1300 350 819 for up to date terms and conditions when transacting.
applicable to the following business day.4
Your request Important Things to note
info
Switching between options
You can switch between Hostplus SMI $5,000* Switch requests are processed as a withdrawal from one option and
investment options at any time via the an investment into another, which occurs on the same business day.
online investor portal. *Switches may be accepted below the minimum limit where the
The minimum investment switch is $5,000* balance of an option has fallen below that minimum limit due to
per investment option, subject to the ongoing market movement.
balance requirement of $5,000 per option. You should refer to the PDS in its entirety available from the
Hostplus SMI website hostplus.com.au/smi or by the Hostplus SMI
service team on 1300 350 819 for up to date terms and conditions
when transacting.
Switches are processed on every national business day. A national business day is a weekday that is not a national public holiday. Switch
requests between investment options received before 2.00pm (AEST/AEDT) are transacted at the unit prices applicable on the day your
request is received, otherwise they are not considered to have been received until the following national business day. However, the
calculation of unit prices takes two national business days, and therefore these unit prices will only be available to you two national
business days after receipt of your requested investment switch.
For example, if you make a switch on a Monday, and each of Monday, Tuesday and Wednesday are national business days, then the unit
prices used for your switch will be those relating to Monday, and you will receive them on Wednesday.
For example:
Member action Unit Price
Monday Member raises investment switch before Switch request 'T' (day zero) date
Day 0
2.00pm (AEST/AEDT)
Day 1 Tuesday
Wednesday Effective date for member investment T + 2 date – transactions/switches are
Day 2 switch processed based on the declared unit
price for day zero
Day 3 Thursday
Day 4 Friday
For all transactions, the number of units allocated or redeemed is the dollar value of the transaction divided by the unit price of the
relevant investment option. Your account balance is equal to the number of units you hold in each investment option multiplied by the
relevant unit price for the option.
Your request Important Things to note
info
Making a withdrawal
You can make partial or full withdrawal from $5,000* The effective date of withdrawals will be the date your valid
your Hostplus SMI investment at any time instruction is received.
via the online investor portal. *Withdrawals may be accepted below the minimum limit where the
The minimum withdrawal is $5,000* per balance of an option has fallen below that minimum limit due to
investment option, subject to the ongoing market movement.
balance requirement of $5,000 per option. You should refer to the PDS in its entirety available from the
Requests must be received prior to 2pm Hostplus SMI website hostplus.com.au/smi or by the Hostplus SMI
AEST to receive that day’s unit price. Service team on 1300 350 819 for up to date terms and conditions
when transacting.5
Your request Important Things to note
info
Cancelling a request
You can request to cancel an investment Please contact us at smi@hostplus.com.au or phone
instruction, provided your cancellation is 1300 350 819 to cancel your instruction.
received before 2pm AEST on the same
business day.
Updating your account details
You can manage updates to your personal Evidence may be required to verify certain requests.
account details online any time and over the Further details including any forms required are available from the
phone Monday to Friday 8am to 8pm AEST. Hostplus SMI website hostplus.com.au/smi or by the Hostplus SMI
Service team on 1300 350 819.
Appointment of Power of Attorney or Legal Guardian
A Power of Attorney (POA) or Legal Guardian Appointments may often be requested where the Trustee / Director
may be appointed to act on behalf of an elects to outsource the administration requirements of their SMSF
individual Trustee or Director. investments, is temporarily absent from Australia, physically or
Appointments allow the nominated party mentally incapacitated, or under the age of 18.
to manage the assets of the Trustee or Certified evidence will be required by Hostplus. Please contact us on
Director and they can do anything on behalf 1300 350 819, or via smi@hostplus.com.au for more information.
of that Trustee or Director that they could An appointment will remain in force until notice of revocation by
lawfully do themselves. the individual Trustee or Director for whom they act is received by
Hostplus will determine what, if any, powers Hostplus.
will be granted to the nominated party The appointment of a POA or Legal Guardian who resides outside
based on evidence provided upon request. of Australia will not be accepted.
Investor support & enquiries
A range of assistance services are A selection of help guides and FAQs are available on our website and
available to enhance your Hostplus SMI investor portal.
investor experience. Our friendly and experienced support team are also on hand for further
assistance on 1300 350 819 Monday to Friday, 8am - 8pm AEST.
User ID and Password assistance
If you require assistance accessing the
investor portal, including password issues,
please call 1300 350 819 or email
smi@hostplus.com.au
Investor correspondence and reporting. Suspension of applications, switches, redemptions
and withdrawals
Correspondence for your Hostplus SMI investment will be
The Trustee may suspend or restrict applications, switches,
made available to all nominated parties including Trustees
redemptions and withdrawal requests, for all or a particular
Directors authorised representatives, and their delegates
investment option at its absolute discretion. In such
and/or representatives via email or the online investor portal.
circumstances, transactions may not be processed or
These communications may relate to transactions and account
may be processed with significant delay.
updates, statements, product updates, and promotional and
educational information. The Trustee may also decide to process a transaction request
for a particular type of benefit from a suspended, restricted
Hostplus SMI provides investors with quarterly statements
or closed option on a case by case basis. Any decision about
and an annual report. These, and a range of on-demand reports
whether to process transactions from such an option will be
can be accessed via your online account.
made in the best interests of investors as a whole.
All impacted transaction requests will be processed using the
effective unit price applicable on the date the suspension is
lifted, or the date special approval is granted if earlier.6
Investments
and risks
Superannuation benefits are subject to investment risks and
can change in value. Each investment option has different risk
characteristics and volatility. Net investment returns can have a
positive or negative effect on your account balance depending
on investment performance.
Hostplus Self-Managed Invest investment options explained
Hostplus SMI invests through the Hostplus PST, in order to
access the investment options. Investors in Hostplus SMI can
choose to invest in the following investment options:
Accumulation or Pension phase
Balanced
Indexed Balanced
IFM - Australian Infrastructure
Infrastructure
Industry Super Property Trust - Property
Property
Further details of the investment options are outlined in the
following tables.
1 William street, Australia
(Image credit: ISPT Property)7
Balanced Indexed Balanced
Accumulation: Accumulation:
CPI plus 3% p.a. on average over 10 years CPI plus 2.5% p.a. on average over 20 years
Target return
CPI plus 4% p.a. on average over 20 years Pension:
Target return
Pension: CPI plus 3.5% p.a. on average over 20 years
CPI plus 3.5% p.a. on average over 10 years High (Negative returns expected in
CPI plus 5% p.a. on average over 20 years Investment risk1 between 4 to less than 6 out of every
20 years)
Medium to high (Negative returns
Investment risk1 expected in between 3 to less than Investments through diversified
4 out of every 20 years) investment portfolio, including
Investment style
some growth assets and some lower
Investments through diversified
risk investments.
investment portfolio, including
Investment style
some growth assets and some lower This option is diversified across a
risk investments. range of growth and defensive assets
and aims to produce consistent
This option is diversified across a
returns over time.
range of growth and defensive assets
and aims to produce consistent Investment This option may suit Accumulation
returns over time. objective investors who have a five year plus
investment time horizon.
Investment This option may suit Accumulation
objective investors who have a five year plus This option may suit Pension
investment time horizon. investors who have a five year plus
investment time horizon.
This option may suit Pension
investors who have a five year plus Minimum Accumulation:
investment time horizon. suggested 5 + years
investment time Pension:
Minimum Accumulation:
frame2 5 + years
suggested 5 + years
investment time Pension: Asset allocation guidelines
frame2 5 + years
Strategic Asset
Asset allocation guidelines Asset Class Range Allocation
Benchmark
Strategic Asset
Asset Class Range Allocation Australian Shares 25 – 55% 32%
Benchmark
International 25 – 55% 43%
Australian Shares 10 – 40% 21% Shares - Developed
Markets
International 10 – 40% 21%
Shares - Developed International Shares 0 – 10% 0%
Markets - Emerging Markets
International Shares 0 – 15% 8% Diversified Fixed 10 – 30% 17%
- Emerging Markets Interest
Property 0 – 30% 13% Cash 0 – 20% 8%
Infrastructure 0 – 30% 12%
75% Growth Assets
Private Equity 0 – 20% 8%
25% Defensive Assets
Credit 0 – 20% 7%
Alternatives 0 – 20% 5%
Diversified Fixed 0 – 20% 0%
Interest
Cash 0 – 15% 5%
76% Growth Assets
24% Defensive Assets
1. The level of investment risk is based on an industry-wide Standard Risk Measure. It shows the number of expected negative annual returns over a 20-year period. 2. The
Minimum Suggested Investment Time Frame is based on the risk and return profile of this option. The time frame considers volatility and the likelihood of negative annual
returns in any one year.8
IFM - Australian Infrastructure Infrastructure
Accumulation: Accumulation:
CPI plus 2.5% p.a. CPI plus 2.5% p.a.
on average over 20 years on average over 20 years
Target return Target return
Pension: Pension:
CPI plus 3.5% p.a. CPI plus 3.5% p.a.
on average over 20 years on average over 20 years
Medium to high (Negative returns Medium to high (Negative returns
Investment risk1 expected in between 3 to less than Investment risk1 expected in between 3 to less than
4 out of every 20 years) 4 out of every 20 years)
Long-term direct investment option Long-term direct investment option
that invests in tangible infrastructure that invests in tangible infrastructure
Investment style assets, such as airports, seaports, toll Investment style assets, such as airports, seaports, toll
roads, renewable energy and utilities, roads, renewable energy and utilities,
across Australia. both within Australia and globally.
This option consists of tangible This option consists of tangible
Australian infrastructure assets and infrastructure assets and aims to
aims to achieve income returns and achieve income returns and capital
capital growth over the longer term. growth over the longer term.
Investment This option may suit Accumulation Investment This option may suit Accumulation
objective investors who have a five year plus objective investors who have a five year plus
investment time horizon. investment time horizon.
This option may suit Pension This option may suit Pension
investors who have a five year plus investors who have a five year plus
investment time horizon. investment time horizon.
Minimum Accumulation: Minimum Accumulation:
suggested 5 + years suggested 5 + years
investment time Pension: investment time Pension:
frame2 5 + years frame2 5 + years
Asset allocation guidelines Asset allocation guidelines
Strategic Asset Strategic Asset
Asset Class Range Allocation Asset Class Range Allocation
Benchmark Benchmark
Infrastructure 0 – 100% 100% Infrastructure 0 - 100% 100%
60+40 60%
40%
Growth Assets
Defensive Assets
60+40 60%
40%
Growth Assets
Defensive Assets
1. The level of investment risk is based on an industry-wide Standard Risk Measure. It shows the number of expected negative annual returns over a 20-year period.
2. The Minimum Suggested Investment Time Frame is based on the risk and return profile of this option. The time frame considers volatility and the likelihood of
negative annual returns in any one year. The IFM - Australian Infrastructure option may be closed to new investors if a cap of 3% of total funds under management
for the Trust is reached.9
Industry Super Property Trust (ISPT) - Property Property
Accumulation: Accumulation:
CPI plus 2.0% p.a. CPI plus 2.0% p.a.
on average over 20 years on average over 20 years
Target return Target return
Pension: Pension:
CPI plus 3.0% p.a. CPI plus 3.0% p.a.
on average over 20 years on average over 20 years
High (Negative returns expected in High (Negative returns expected in
Investment risk1 between 4 to less than 6 out of Investment risk1 between 4 to less than 6 out of
every 20 years) every 20 years)
The option invests in Australian This option invests in Australian
property across a variety of sectors and global property across a variety
and has an income bias aiming to of sectors and has an income bias
Investment style offer investors lower relative earnings Investment style aiming to offer investors lower relative
volatility and a higher income yield, earnings volatility and a higher income
albeit with some exposure to yield, albeit with some exposure to
capital appreciation. capital appreciation.
This option aims to achieve consistent This option aims to achieve consistent
income returns and capital growth income returns and capital growth
over the longer term. over the longer term.
This option may suit Accumulation This option may suit Accumulation
Investment Investment
investors who have a seven year plus investors who have a seven year plus
objective objective
investment time horizon. investment time horizon.
This option may suit Pension investors This option may suit Pension investors
who have a seven year plus investment who have a seven year plus investment
time horizon. time horizon.
Minimum Accumulation: Minimum Accumulation:
suggested 7 + years suggested 7 + years
investment time Pension: investment time Pension:
frame2 7 + years frame2 7 + years
Asset allocation guidelines Asset allocation guidelines
Strategic Asset Strategic Asset
Asset Class Range Allocation Asset Class Range Allocation
Benchmark Benchmark
Property 0 - 100% 100% Property 0 – 100% 100%
30% Growth Assets 30% Growth Assets
70% Defensive Assets 70% Defensive Assets
1. The level of investment risk is based on an industry-wide Standard Risk Measure. It shows the number of expected negative annual returns over a 20-year period. 2.
The Minimum Suggested Investment Time Frame is based on the risk and return profile of this option. The time frame considers volatility and the likelihood of negative
annual returns in any one year.10
Investment risks. · Australian fixed interest – changes in interest rates in particular
will have an impact on fixed interest investments so that, if interest
All investments are subject to varying risks and can change in rates change during the term of a loan, there could be capital gains
value. There are risks in choosing to invest in superannuation or capital losses. Depending on the nature of the issuer of the
and each investment option has different risk characteristics investment, there is a varying level of risk that the borrower may
and volatility. default on repayment of the loan.
The most significant risks are: · International fixed interest – similar to Australian fixed interest
but with additional risks associated with exchange rates and
Inflation risk
currencies, and political developments.
Inflation may exceed the return on your investment - inflation
is measured by the Consumer Price Index (CPI). Where the Each asset class and investment option has its own level of risk
CPI increases, money has less purchasing power. When an and return. Typically, the greater an investment risk, the greater
investment provides a lower return than the increase in inflation, its potential return over the long term.
it actually loses value in terms of purchasing power. Therefore, Other risks may also affect the accessibility or value of your
it is important to invest in assets that are expected to generate investment. These include:
returns in excess of inflation over the medium to long term.
Liquidity risks
Market risk
This refers to the ability to convert an investment into cash with
Economic, technological, political or legal conditions and little or no loss of capital and minimum delay. Some investments,
even market sentiment can change and affect the value of such as direct property and infrastructure, are relatively illiquid.
investments.
Security specific risks
Changes in interest rates
Where an individual company or asset fails, for example through
Interest rate changes can have a positive or negative impact bankruptcy, fraudulent activity or the business environment in
on investment returns across asset classes. which it operates, the value of the investment can fall sharply
Foreign exchange Derivatives risks
If we invest in assets in other countries there is a risk their Derivatives are used by Hostplus SMI’s investment managers for
currencies could change in value relative to our dollar and many purposes, including hedging to protect an asset against
so increase or reduce the value of the investment. market fluctuations, reducing costs of achieving a particular
market exposure, and specifically using derivative overlays to
Investment styles
manage Hostplus SMI’s exposure to foreign currency movements
Varying investment styles will perform differently depending against the Australian dollar. The Trustee has appointed various
on market conditions and other factors. external investment managers who can directly invest in
derivatives in order to assist with the effective management and
Risks associated with each individual investment
protection of Hostplus SMI assets. To satisfactorily manage this
Individual investments can fall in value for many reasons. risk we set appropriate terms, levels of usage and constraints.
For example: The Trustee also obtains confirmation from these investment
· Australian shares – inflation, interest rates and changes in managers that they have the appropriate risk management
market conditions will all have an effect on the value of shares, processes in place in relation to the use of derivatives.
as does the performance of the company itself. Market failure
· International shares – the risks relating to international shares There is a risk of broad market failure or significant financial
are the same as for Australian shares. There are also additional collapse that affects investments broadly. Such events are
risks relating to exchange rates and currencies, and political risks outside the control of the Trustee. Consequently, even long-
associated with investing in assets in that country. term investors like superannuation investors should be mindful
· Property and Infrastructure – returns on these asset classes of the risk that if such high impact events occur, their benefits
can rely on general economic factors such as inflation, interest may be less than the total amount of contributions invested.
rates and employment, as well as unique factors such as its
location, quality and competition.11
Investment risk measure. Operational risks.
The Standard Risk Measure (SRM) has been adopted to assist Operational risks include the possibility of a financial loss
investors in comparing investment options (both within and arising from:
across superannuation) using a simplified risk measure. The SRM
is not a complete assessment of all forms of investment risk;
· Inadequacy of Resources (Human, Financial and Technological),
for instance, it does not detail what the size of a negative return · Business Continuity / Disaster Recovery,
could be or the possibility of returns not being adequate to meet
an investor’s investment objectives. Further, it does not take
· Fraud and Theft,
into account the impact of administration fees and tax on the · Administrative Errors,
likelihood of a negative return. Investors should still ensure they
are comfortable with the risks and potential losses associated
· Inappropriate Advice,
with their chosen investment option/s. · Unit Pricing errors, or
· Failure of Outsourced Providers.
Risk measures and categories
Most operational risks can be controlled by the Trustee through
Level of investment risk – its internal control framework.
SRM
SRM risk estimated number of negative
risk The Trustee has a compliance and risk management program in
label net investment returns over a
identifier place to manage these risks. In addition to the operational risks
20 year period
that may arise, there is also the possibility for legal or legislative
1 Very low Less than 0.5 risks to occur. These risks include:
2 Low 0.5 to less than 1 · superannuation legislation changes that may affect your benefit
or ability to access a benefit,
3 Low to 1 to less than 2
medium · taxation changes that may affect the value of your investment,
4 Medium 2 to less than 3 · economic or political climate changes,
5 Medium to 3 to less than 4 · Government policy and law changes, or
high
· Hostplus SMI’s termination, the Trustee being replaced or
6 High 4 to less than 6 investment managers changing.
7 Very high 6 or greater12
How we invest your money
What are asset classes? cash, term deposits and some fixed interest investments.
Some asset classes, such as infrastructure, property and
When investing your fund’s superannuation, you may choose alternatives may have both growth and defensive characteristics.
between different types of assets. Assets are divided into asset
Where assets such as infrastructure, property and alternatives
classes such as cash, fixed interest, property, infrastructure,
derive a high proportion of their returns from strong income
equity and other (alternatives) and are generally described as:
(cash) flows rather than capital growth, these assets may be
Growth assets: Growth assets generally provide relatively higher classified as defensive. Where they derive a high proportion
returns over the longer term with a corresponding higher level of their returns from capital growth rather than income (cash)
of risk (increased chance of a negative return and volatility). flows these assets may be classified as growth.
A high proportion of their returns are derived from capital Investment markets are difficult, if not impossible, to predict.
growth. Examples include shares and some property and Often, different asset classes generally will not all perform well
infrastructure investments. or poorly at the same time because they react differently to
Defensive assets: Defensive assets generally are lower risk(less influences such as economic growth, inflation, interest rates
chance of a negative return), with a corresponding expectation and exchange rate movements. A change which is positive for
of lower returns over the longer term. A high proportion of their one asset class can have a negative effect on another.
returns are derived from income (cash) flows. Examples include
Basic asset classes make up your investment portfolio
What is it?
Equity Infrastructure
Represents an ownership interest in a business, trust or partnership. Represents the basic physical systems
Equity investments include shares and private equity. of a country, state or region including
transportation, communication, utilities,
Shares Private equity
and public institutions.
Represent part-ownership of a company Private equity involves investments in Infrastructure assets can also take the
through holding shares. entities or vehicles that are not listed on form of social infrastructure assets such
a stock exchange. They can be based in as hospitals, schools and aged care
Australia and overseas. facilities.
How does the investment work?
Because shares represent a part of the Private equity investments are usually Investments in infrastructure can be
company, returns vary according to made to finance one or more stages of through direct investments in single
how the company performs. Returns a company’s growth cycle, ranging from assets, listed or unlisted pooled funds
can come in two ways – dividends paid those in early stages of development to and investment through
to shareholders (revenue) and the more mature businesses seeking capital. a fund of funds vehicle.
increase in value of the shares (capital Private equity vehicles are used for many
gain). Shares can also decrease in value purposes including buying out the owners
resulting in a capital loss. or founders of an existing business or asset.
What’s the risk/return?
Inflation, interest rates, exchange rates The private equity market is less efficient The investment objective for investing
(for international shares) and changes and less regulated than the listed market. in infrastructure is typically to provide
in market conditions will all have an This inefficiency creates opportunities for returns of inflation plus 6 – 8% per annum,
effect on the value of shares, as does skilled managers to add value. Given the but with the chance of a return that’s
the performance of the company itself. greater risk associated with private equity, lower than Australian and international
Shares are considered the highest a return premium of at least 4 – 5% above shares, over a 5 – 10 year term.
risk investment because they may listed markets is generally considered
experience significant changes in value. necessary.
Despite their short-term volatility, shares
have traditionally provided higher returns
to investors – over the longer term – than
all other asset classes.13
Property Fixed interest Cash Alternatives
What is it?
Represents an investment Represents a loan, placement Represents cash on hand Almost any non-traditional
in real estate where the or debt security. Loans are and demand deposits, as well investment strategy could
earnings and capital value financial assets that are as cash equivalents. Cash be classified as an alternative
are dependent on cash flows created when a creditor lends equivalents represent short- investment for example, credit
generated by the property funds directly to a debtor, and term, highly liquid investments investments (see the glossary
through sale or rental income. are evidenced by documents that are readily convertible for further information).
The investment in property that are non-negotiable. to known amounts of cash
could be made either directly Placements are liabilities and which are subject to an
or via property trusts. of entities not described insignificant risk of changes
as authorised deposit- in value.
taking institutions, eg. State Cash investments may
treasuries. Debt securities include deposits in a bank,
are securities which represent investments in short-term
borrowed funds which must money markets and other
be repaid by the issuer with similar investments.
defined terms including the
notional amount (amount
borrowed), an identifiable return
and maturity/renewal date.
How does the Investment work?
There are two ways that The investment is used to Cash investments, such as Alternative investments
property can provide returns finance the operations of your own bank account, don’t generally aim to achieve a
– by earning rental income governments, organisations necessarily earn high returns, return objective, rather than
(revenue) or by increasing in or businesses, and is paid but they are usually very stable. to outperform a specific
value over time (a capital gain). back on an agreed date with sector goal.
Property can also decrease in interest, which is also agreed
value resulting in a capital loss. or ‘fixed’ before the loan
commences.
What’s the risk/return?
Property is considered Fixed interest is seen as a Cash is considered to be the Alternatives aim to produce
a moderate to high risk moderate risk investment. lowest-risk investment and returns in excess of cash over
investment. Returns rely on If interest rates change during has limited potential to rise the long term. However its
general economic factors the term of the loan, there and fall in value over the short volatility over the long term is
like inflation, interest rates will be capital gains or losses. term. However, this perceived generally higher than that of
and employment, as well as Fixed interest investments safety comes at a price – cash fixed interest.
location and quality. While are generally less volatile over investments typically may not
returns are generally higher the short term than property earn enough to meet long-
than cash or fixed interest, or equity. term goals like retirement.
the value of property
investments is also liable
to change suddenly.14
Change of investment managers, including individual Our predetermined view
investment manager options Hostplus is committed to responsible investment across all its
The Trustee is responsible for selecting investment managers, investment activities including: across all geographic locations,
monitoring their progress and determining the overall all asset classes; all structures (eg. mandated and pooled funds)
investment profile. Sometimes, a decision may be made to and all styles (including active and passive management).
remove an investment manager as a result of poor investment
Hostplus’ approach to responsible investment is influenced by
performance, change in key personnel or a shift in a manager’s
its investment strategy, including outsourcing to investment
style or the Hostplus SMI investment strategies.
managers to invest on its behalf. The way and extent to which
When an investment manager is removed, a manager with a responsible investment is incorporated into investment
similar or different investment style can replace it. Alternatively, decisions will differ across the portfolio and is dependent on the
the assets in which that manager was investing may also be relevance of ESG factors to a particular asset class and the style
allocated to one or more of our existing managers. of the investment strategy. ESG factors considered may include:
As part of the Trustee’s fiduciary duties, investment managers
are constantly reviewed and monitored. There may be
Environmental Social Governance
circumstances where the Trustee will decide to terminate an
individual investment manager option at short notice or due to · Climate change · Human rights · Board structure,
an unforeseen event. In these instances, the Trustee reserves · Pollution and · Labour rights size, diversity,
the right to remove the individual investment manager option waste skills and
· Health & safety independence
immediately and transfer the funds as Hostplus sees appropriate, · Resource
until obtaining your instructions. The Trustee will notify affected · Employee · Executive
depletion relations
investors of the change after the event, but generally within remuneration
30 days of the change.
· Biodiversity · Human capital · Shareholder
· Land use changes management rights
For a full list of investment managers for Hostplus SMI · Aboriginal and
investment options, please refer to the investment option Torres Strait
· Corporate culture
pages available at hostplus.com.au/smi. and ethics
Islander rights
and relations · Bribery and
Responsible investment. · Local
corruption
communities’ · Risk management
Our primary duty is to deliver the best retirement outcomes
for our members. We also widely support, and invest in, the relations · Lobbying
hospitality, tourism, recreation and sport sectors our members · Consumer · Tax strategy
work in, live and love. These responsibilities guide every decision protection
we make, and great care is taken to ensure each action fulfils
these duties. While consideration of ESG factors (labour standards or
Responsible investment is an important part of our investment environmental, social or ethical considerations) is part of
approach that helps us better manage risk and optimise Hostplus’ approach to responsible investment across all
retirement outcomes for our members. Our approach to investment activities, application of ethical screens in decisions
responsible investment is informed by our responsible about the selection, retention or realisation of Hostplus’
investment beliefs and implemented through an approach investments is limited to the extent these are relevant under
based on four pillars – environmental, social and governance Hostplus’ Controversial Weapons Divestment Policy.
(ESG) integration; active ownership; building Australia’s future; Through this Policy, we do not invest in companies involved in the
and member values. Our Responsible Investment Policy can development production, maintenance or sale of controversial
be found on our website at hostplus.com.au/super/about-us/ weapons. Further, Hostplus does not explicitly apply minimum
investment-governance labour standards in decisions about the selection, retention or
realisation of investments.15
ESG integration Climate change
For all asset classes, Hostplus is committed to ESG integration. Hostplus recognizes that climate change may influence the
ESG factors are considered as part of our annual strategic asset performance of the Hostplus’ investments over time and that
allocation process and are taken into account in setting investment the impact will be dependent on the extent of physical, social
objectives. Hostplus, together with its investment adviser, JANA and regulatory changes. In order to manage the financial risk
Investment Advisers Pty Ltd (JANA), also reviews investment due to climate change in our portfolio, we consider the risks
managers’ abilities to integrate ESG risks and opportunities into and impacts arising from climate change in all aspects of the
their investment decision making process as part of the investment investment process.
manager selection and review process. While the approach to
More information on Hostplus’ approach to climate change go to
ESG integration may vary by manager, each manager’s ability to
https://hostplus.com.au/investment/investment-governance/
consider and evaluate ESG factors must be in line with that of their
climate-change.
asset class peer group at a minimum for inclusion in the portfolio.
In this way ESG considerations will be one factor that informs What is the relationship between the Trustee and the
how Hostplus’ investment managers invest on behalf of Hostplus, companies it invests through?
including decisions about the selection, retention or realisation
The Trustee has an arm’s length commercial relationship with
of Hostplus’ investments across the portfolio.
the companies we invest through. The Trustee undertakes that
Active ownership it will not deal with any companies in which it has an interest
more favourably than it would deal with any other independent
Our preference is to retain exposure to a broad range of sectors
service provider.
and seek to create change within companies or sectors that we
invest in through engagement rather than divest from a company Investment objectives and strategies
or sector and lose influence. Therefore, Hostplus pursues an
The Trustee bases its objectives on professional advice from
active ownership program (which includes engagement and
our independent asset consultant. The asset consultant takes
proxy voting) in order to positively influence company behaviour
into account the possible impact of economic forecasts on the
and performance and therefore contribute positively to long-
different asset classes in which the options invest.
term returns. Key principles which direct our engagement
and proxy voting focus on board oversight and accountability, Investment strategies are developed by the Trustee in
shareholder rights, major transactions, remuneration and ESG risk conjunction with its asset consultant, to create a high probability
management and disclosure. Hostplus engages with companies of attaining the outlined objective of each investment option.
primarily through its membership of the Australian Council of
Strategies are amended from time-to-time to reflect changing
Superannuation Investors (ACSI), as well as directly
circumstances in different markets.
and through investment managers.
The investment objectives simply reflect the intention of
We also take our proxy voting rights seriously, aiming to vote in all
the Trustee, and these should not be used or relied upon as
matters where it is practical for us to do so. We make our voting
indicators or predictors of the future performance of the options.
decisions taking into account voting guidance from specialist
They are provided in order to give investors a guidance on the
service providers, recommendations from our investment
level of returns that the options could produce, based on the
managers and based on Hostplus’ key engagement and voting
historical, long-term experience of the different asset classes
principles. More information about our approach to proxy
in which the options invest.
voting can be found in our Responsible Investment Policy and
we publicly disclose a full record of our voting decisions on the Past performance however is not a reliable indicator
investment governance section of our website: hostplus.com. of future performance and investors should be aware
au/super/about-us/investment-governance. that changing market conditions can cause the value
of investments to change.16
Fees and costs
Consumer advisory warning.
Did you know?
Small differences in both investment performance and fees
and costs can have a substantial impact on your long-term
returns. For example, total annual fees and costs of 2%
of your account balance rather than 1% could reduce your
final return by up to 20% over a 30 year period (for example
reduce it from $100,000 to $80,000).
You should consider whether features such as superior
investment performance or the provision of better member
services justify higher fees and costs. You or your employer,
as applicable, may be able to negotiate to pay lower fees.
Ask the fund or your financial adviser.
To find out more.
If you would like to find out more, or see the impact of the
fees and costs based on your own circumstances, the
Australian Securities and Investments Commission (ASIC)
website (www.moneysmart.gov.au) has a superannuation
calculator to help you check out different fee options.
This section shows fees and other costs that you may be
charged and can be used when comparing costs of Hostplus
SMI with other similar products. These fees and other costs
may be deducted from your account, from the returns on your
investment, or from the assets of Hostplus SMI as a whole.
Fees and costs are quoted inclusive of GST. Further details
regarding GST and other taxes are available in Section 6
of the PDS.
You should read all the information about fees and costs
because it is important to understand their impact on your
investment. Fees or costs may change from time to time,
which may affect the value of your investment. Where
required by law you will be provided with prior notice of
any such increases.
1 William street, Australia
(Image credit: ISPT Property)17
Type of fee Amount How and when paid
Varies according to your chosen investment The investment fee is not deducted from your
option(s): account balance.It is deducted daily from gross
Balanced 0.71% p.a. investment earnings before net investment
Balanced Pension 0.70% p.a. returns are applied to your account.
Indexed Balanced 0.02% p.a.
Investment fee IFM – Australian Infrastructure 0.37% p.a.
Infrastructure 0.49% p.a.
ISPT – Property 0.27% p.a.
Property 0.51% p.a.
Refer to Additional Explanation of fees and costs
on the following page for more detail.
$165 p.a. The dollar cost is calculated and deducted
from your account monthly. If you are invested
in more than one investment option, the
Administration fee
administration fee is proportionately charged
to each investment option based on the end of
month valuation.
Buy/Sell spread Nil Not applicable
Switching fee Nil Not applicable
$240 The dollar cost is deducted from your initial
application amount. If you have nominated more
Joining fee than one investment option, the joining fee is
proportionately charged to each investment
option based on your nomination.
Exit fee Nil Not applicable
Advice fee Nil Not applicable
Relating to all members
investing in the
investment option.
Other fees and costs For more information refer to Additional Explanation of fees and costs below.
Varies according to your chosen investment The ICR is not deducted from your account
option(s): balance. It is deducted daily from gross
Balanced 0.39% p.a. investment earnings before net investment
Balanced Pension 0.37% p.a. returns are applied to your account.
Indexed Balanced 0.04% p.a.
Indirect Cost
IFM – Australian Infrastructure 0.25% p.a.
Ratio (ICR)1
Infrastructure 0.32% p.a.
ISPT – Property 0.64% p.a.
Property 0.50% p.a.
Refer to Additional Explanation of fees and costs
on the following page for more detail.
1. The Investment fee and ICR costs incorporate the actual 2020 financial year expenses incurred, which is the most up-to-date information available as at the date of
the preparation of this PDS. The Investment fees and ICR costs also represent the Trustee’s best estimate of the investment costs that are anticipated to be incurred
in relation to your investment in Hostplus SMI. The actual investment costs incurred in the future are not known at the time of preparation of this PDS, and the overall
Investment fee and ICR costs may be higher or lower than the amounts provided in the table.18
Example of annual fees and costs for the Balanced option You should read the important information about Fees and costs
This table gives an example of how the fees and costs for the before making a decision to invest. The material relating to our
Balanced option can affect your investment over a 1 year period. Fees and costs may change between the time when you read the
You should use this table to compare this superannuation PDS and this Additional information brochure and the day when
product with other superannuation products. you acquire the product.
Financial adviser fees
Example – Balance of $50,000
Balanced option Financial adviser fees are not payable out of your Hostplus
SMI account.
0.71% For every $50,000 you have
Investment in the option, you will be
fees Additional explanation of fees and costs.
charged $355 each year.
Defined Fees
PLUS $165 And, you will be charged
Administration $165 in administration fees 1. Investment fees
fees regardless of your balance. An investment fee is a fee that relates to the investment of
the assets of a superannuation entity and includes:
PLUS Indirect 0.39% And, indirect costs of $195
Costs for the each year will be deducted · fees in payment for the exercise of care and expertise in the
Balanced from your investment. investment of those assets (including performance fees); and
option
· costs that relate to the investment of assets of the entity,
If your balance was $50,000, other than;
then for that year you will be
Cost of product - borrowing costs; and
charged fees of $715 for the
Balanced Option. - indirect costs that are not paid out of the superannuation
Note: Additional fees may apply. And, if you leave the superannuation entity, you entity that the trustee has elected in writing will be treated
may be charged an exit fee of $0 and a buy/sell spread which also applies whenever as indirect costs and not fees, incurred by the trustee of
you make a contribution, exit, rollover or investment switch. The buy/sell spread for the entity or in an interposed vehicle or derivative financial
exiting is 0% (this will equal to $0 for every $50,000 you withdraw).
product; and
Example – Balance of $50,000 - c osts that are otherwise charged as an administration fee,
Balanced Pension a buy-sell spread, a switching fee, an exit fee, an activity fee,
an advice fee or an insurance fee.
0.70% For every $50,000 you have in the
Investment Performance fees
fees option, you will be charged $350
each year. In certain circumstances, Hostplus agrees, as part of the fees
payable to an investment manager, to pay a performance fee.
PLUS $165 And, you will be charged $165 in Performance fees are payable to investment managers if they
Administration administration fees regardless
outperform required performance targets. The performance
fees of your balance.
fee payable varies between the underlying investment managers
PLUS Indirect 0.37% And, indirect costs of $185 and may change from time to time; hence it is not possible
Costs for the each year will be deducted from to provide a precise figure for the performance fee for each
Balanced your investment. investment option.
option
Performance fees are quoted within the total investment fee and
If your balance was $50,000, are indirectly borne by investors through the declaration of daily
then for that year you will be unit prices.
Cost of product
charged fees of $700 for the
Balanced Option.
Note: Additional fees may apply. And, if you leave the superannuation entity,
you may be charged an exit fee of $0 and a buy/sell spread which also applies
whenever you make a contribution, exit, rollover or investment switch.
The buy/sell spread for exiting is 0% (this will equal to $0 for every $50,000
you withdraw).19
The total investment fee of each investment option includes: Operational Costs include all administrative / operational
expenses that are additional costs – for example, custody,
Investment Management Performance Total accounting/ tax, trustee-related expenses, organisational
Option Fee Fee Investment expenses, advisory committee expenses, director fees,
Fee regulatory and compliance costs, administration, legal fees,
salaries, consulting and other overheads.
Balanced 0.55% p.a. 0.16% p.a. 0.71% p.a.
The ICR of each investment option includes:
Balanced 0.53% p.a. 0.17% p.a.
0.70% p.a.
Pension
Investment Management Performance Total ICR
Indexed 0.02% p.a. 0.00% p.a. Option Fee Fee
0.02% p.a.
Balanced
Balanced 0.23% p.a. 0.16% p.a. 0.39% p.a.
IFM – 0.37% p.a. 0.00% p.a.
Balanced 0.21% p.a. 0.16% p.a.
Australian 0.37% p.a. 0.37% p.a.
Pension
Infrastructure
Indexed 0.03% p.a. 0.01% p.a.
Infrastructure* 0.37% p.a. 0.12% p.a. 0.49% p.a. 0.04% p.a.
Balanced
Industry Super 0.27% p.a. 0.00% p.a.
IFM – 0.06% p.a. 0.19% p.a.
Property Trust 0.27% p.a.
Australian 0.25% p.a.
– Property
Infrastructure
Property 0.49% p.a. 0.02% p.a. 0.51% p.a.
Infrastructure* 0.11% p.a. 0.21% p.a. 0.32% p.a.
The disclosed performance fee represents actual fees paid and where applicable
reasonable estimates of fees to be paid for the financial year ended 30 June Industry Super 0.31% p.a. 0.33% p.a.
2020. The performance fee may change in subsequent years depending on (for Property Trust 0.64% p.a.
example) the performance of the underlying investments. *The Infrastructure – Property
option was introduced on 1 December 2019, therefore the Indirect Cost Ratio
and the Investment Fee for this option is not based on actual expenses incurred
from 1 July 2019 but on reasonable estimates expected for the full 2019/20
Property 0.29% p.a. 0.21% p.a. 0.50% p.a.
financial year.
*The Infrastructure option was introduced on 1 December 2019, therefore the
Indirect Cost Ratio and the Investment Fee for this option is not based on actual
expenses incurred from 1 July 2019 but on reasonable estimates expected for the
2. Indirect Cost Ratio (ICR) full 2019/20 financial year.
The Indirect Cost Ratio (ICR), for an investment option offered
by a superannuation entity, is the ratio of the total of the indirect The ICR for each investment option has been calculated based
costs for an investment option, to the total average net assets of on the investment costs incurred for the financial year ended
the superannuation entity attributed to the investment option. 30 June 2020. The ICR for each investment option may change
Note: A fee deducted from a member’s account or paid out of in subsequent years depending on (for example) a change in the
the superannuation entity is not an indirect cost. mix of underlying investment managers.
Transactional and operational costs Borrowing costs
Transactional and operational costs are included in the Indirect Borrowing costs are an additional cost to the investor that is
Cost Ratio (ICR). Transaction costs are incurred when assets recovered daily from the assets of Hostplus SMI or the assets
are bought or sold. Different transaction costs arise depending of an underlying investment vehicle when unit prices are declared.
on the assets involved. For example, the transaction costs Borrowing costs may arise in a few circumstances, including (but
incurred in buying or selling listed securities and derivatives are not limited to) where money is borrowed to purchase an asset and
different to the transaction costs incurred in buying or selling where securities are borrowed as part of the investment strategy.
property, private equity and infrastructure assets. Examples of
transactional and operational costs include:
· Stamp Duty
· Settlement and Clearing costs
· Bid-Ask spreads (see Glossary)
· BrokerageYou can also read
