Investment choice guide - LGIAsuper
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Investment choice guide
Date issued: 30 September 2021
The information in this document
forms part of the Accumulation
account Product Disclosure
Statement, Date issued: 30
September 2021.
This document has been prepared and issued by LGIAsuper Trustee
(ABN 94 085 088 484 AFS Licence No. 230511) as trustee for LGIAsuper (ABN 23 053 121 564)
LGIAsuper is an authorised MySuper product provider (Product number 23 053 121 564 638)
Contents
About this guide 2
Investment basics 3
LGIAsuper's investment options 5
MySuper option 6
Ready-made options 7
Single asset class options 9
Socially responsible options 11
Our approach to ethical investments 12
Making your choice 13
Fees and other costs 15
Additional explanation of fees and costs 18
Defined fees 20
Let us help you achieve a stronger financial future 21
This Investment choice guide has been prepared and issued by (LGIAsuper Trustee ABN 94 085 088 484 AFS Licence No. 230511) as
trustee for LGIAsuper (ABN 23 053 121 564) and provides general information for LGIAsuper members.
LGIAsuper recommends that you should, before acting on this information, consider your own personal objectives, financial needs and
situation. LGIAsuper recommends you consult a licensed financial advisor if you require advice that takes into account your personal
circumstances. LGIAsuper has representatives that are authorised to provide personal advice on LGIAsuper products and superannuation
in general.
The information in this document is up to date at the date of preparation of the document. Some of the information may change
following its release. If the change is not significant we may not update the document immediately. Current information about investment
performance and other issues will be published on our website and in our newsletters. We will send you a free printed copy at your
request. Where there is an inconsistency between this document and the Fund’s rules as per the LGIAsuper Trust Deed and Government
regulations, the rules in the Trust Deed and Government regulations shall prevail.
LGIAsuper INVESTMENT CHOICE GUIDE 1About this guide
Super is one of the best ways to save for
your retirement.Your super is likely to be Here’s what’s in this guide:
one of the biggest assets you’ll ever own,
Investment basics PAGE
so it makes sense to get closer to it.
By understanding how super works and reviewing your
Learn the basic principles of investing 3
(including risk and return) and about the
retirement plans regularly, you’ll have the best chance
different asset classes.
of making sure you’ve got enough super to fund a
comfortable retirement. LGIAsuper’s investment options PAGE
Take the time to read this guide. You’ll read about the Understand the investment options 5
basics of investing and learn how our wide range of LGIAsuper offers and how they can help
investment options can help build your retirement you grow your super.
savings. Making your choice PAGE
Trusted investment advice If you want to make a change, see this 13
If you’d like to review your current investment strategy, section for how to go about it.
you can book an appointment with one of our trusted Fees and other costs PAGE
financial advisers.
Compare fees across our range of 15
Visit our website or call 1800 444 396 to find out more. investment options.
2 LGIAsuper Let's GrowInvestment basics
Learning a few basic investment principles security. One specific investment, such as shares in a
particular company, could experience a major drop in
will help you understand your options so
value. This risk is controlled through diversification of
you can set yourself up for a stronger investments.
financial future. opportunity. By making one investment, you could
For most people superannuation is a long term be missing out on another investment with better
investment. That’s because you are generally unable to opportunities for growth.
access your money until you retire after reaching your timing. If you switch investment option/s just as
preservation age. markets peak or fall it could negatively or positively
affect your account balance.
Identify your goals and start planning
Even if retirement is just around the corner your super
investment may need to last 20 to 30 years or more after
that. Identifying your needs, retirement goals and how Diversification is key
long you have to achieve them is fundamental to a The key to investing is to avoid putting all your
successful retirement plan and will help you when eggs in one basket. Also known as diversification,
choosing an investment strategy. These questions are spreading your money across different
also worth considering: investments reduces the overall risk of your
portfolio. That’s because if one investment falls in
how much super do you have?
value, other investments that are performing well
how much super do you need (in today’s dollars) to over the same period could make up or exceed
generate your desired retirement income? that loss.
how many years do you have to save?
There are many ways to diversify, including across
How much you have in retirement and how long it lasts asset classes, investments within an asset class,
depends on the amount of money you and your employer or among investment managers or countries. We
put into super, how much that money earns through explain more about asset classes below.
investment returns and the impact of fees and taxes.
Investing for long periods generally means you can afford
to take more risk and potentially benefit from higher Our investment philosophy
investment returns. If your timeframe is shorter you might LGIAsuper’s aim is to grow our members’ super balances,
need to reduce your risk and receive lower returns. while providing consistent returns.
Understand risk and return That means we want your investment to grow when
Super, like all investments, carries some risk. Most people markets are performing strongly, and reduce the impact
are aware that there is the possibility of losing some of when markets start to fall.
your money when sharemarkets decline, or when We place great value on diversification, which means
currency exchange rates or interest rates change. not having all your eggs in the one basket. To achieve
But there is another risk—the risk that the value of your this, we spread your money across a number of different
investment won’t keep up with inflation and will lose asset classes to reduce the level of risk.
purchasing power over time. Asset classes
Investment options with higher proportions invested in Traditionally, investments have been classed as either
growth assets, such as shares and property, generally growth assets or defensive assets.
provide higher returns that outpace inflation over the
Growth assets like shares and property tend to rise in
long term than those with more invested in defensive
value over time. Defensive assets like cash and fixed
assets like cash or fixed interest. In return for higher
interest pay regular income.
investment earnings though, you have a higher short
term risk of loss, as these investments regularly rise and At LGIAsuper, we believe many of the assets in our fund
fall in value. can have both characteristics. For example, we see
property, alternatives and infrastructure as having
Other risks of investing in super include:
features of both growth and defensive assets.
legislative. Superannuation laws may change in the
The combination of these growth and defensive features
future. This could affect your account balance, ability
gives members the opportunity to grow their super in a
to make contributions, access to super or its tax
rising market, while providing a degree of protection in
treatment in a positive or negative way.
poorly performing markets.
economic or political. If countries or regions
experience political change, economic crisis or war Depending on the investment option you choose, your
your account balance may be affected. super will be invested across a range of asset classes,
including cash, fixed interest, shares, property,
significant overall market declines. The entire market
infrastructure and alternative investments.
could decline at the same time—not just one or two
asset classes. This could affect your account balance.
LGIAsuper INVESTMENT CHOICE GUIDE 3Cash Much of the return from property comes from rental
Cash is money held on deposit with a bank or in income, although well-located property can be expected
money-market securities. Cash is highly secure and to rise in value over the longer term, providing some
usually available at call. Returns from cash are typically capital growth.
lower than from other asset classes. Returns from cash Historically, property has provided higher returns than
come from interest paid on the deposit. Cash is suited other defensive investments like fixed interest, but lower
to those investing for a short period of time or those returns than shares.
seeking a very high level of security.
Infrastructure
Over time, returns from cash may not keep pace with
Infrastructure investments, such as roads, railways and
inflation resulting in a loss of purchasing power.
airports, are the building blocks which keep an economy
Fixed interest running smoothly.
Fixed interest investments pay regular interest and They can be attractive investments as they usually have
mature on a specified date. They include government long operating lives, generate a growing stream of
and corporate bonds and debentures. income, a high level of inflation protection, and in most
Fixed interest is secure if held until maturity when the cases have little competition.
full face value is payable, but there is the potential for The very long-term nature of most infrastructure assets
short-term changes in value due to the movement of means they can be less volatile than other growth assets
market interest rates. like shares and property.
They offer a higher level of security than shares and Diversifying strategies
property, but provide a lower return over the long term.
The investment aim of diversifying strategies within a
Shares broader investment portfolio is to provide diversification
When you buy shares, also known as stocks or equities, benefits to traditional asset classes.
you are buying part of a company. Publicly listed shares They include hedge funds, insurance-linked strategies,
are traded on stock exchanges like the Australian private debt, emerging market debt, private equity,
Securities Exchange (ASX). venture capital, and agriculture.
When you own a share you have the right to receive part Diversifying strategies may use complex investment
of the company’s profits, paid as a dividend. strategies like short selling, derivatives trading or
Usually, the company reinvests some of its profits back provision of funding to start-up companies.
into the business, so over time the increased value of the They seek sources of investment risk and return that are
company may result in a higher share price. materially different from traditional asset classes,
Australian shares are listed on stock exchanges such as resulting in lower volatility of returns, and provide some
the ASX and include companies like Westpac, downside protection within a broader investment
Woolworths and Telstra. portfolio, particularly against adverse equity or bond
market movements.
International shares are companies listed on foreign stock
exchanges like the New York Stock Exchange (NYSE). Private capital
Private capital seeks to deliver superior returns by
International shares include companies like Apple, Toyota
acquiring stakes in private companies and then pursuing
and Facebook.
an active role in monitoring and advising the companies,
Shares provide the potential for higher returns than other improving operational and corporate governance, and
asset classes, although they carry more risk. This is then selling after a period of time at a premium.
because shares are volatile, which means the share price
The Private capital asset class contains high risk, high
can move up and down over the short to medium term.
expected return investment strategies which are often
opportunistic, and may include private equity, private
credit, agricultural investments and opportunistic
property and infrastructure strategies.
The key to investing is to avoid
Private capital assets are mostly illiquid because they
putting all your eggs in one basket - are traded privately rather than on an exchange.
also known as diversification.
Property
Property, such as offices, shops and factories, can
provide returns from both income and capital growth.
Property may be listed on a stock exchange, such as
listed property trusts, or owned directly.
4 LGIAsuper Let's GrowLGIAsuper's investment options
MySuper option Who can invest in LGIAsuper’s MySuper option?
All members with an Accumulation account can choose
LGIAsuper is MySuper Authorised and can accept all
to have part or all their money invested in this option.
Superannuation Guarantee contributions from employers.
You are unable to invest in the MySuper option for any
The MySuper product is a simple, low-cost option
accumulation component contained within our Defined
designed to suit the needs of most members.
benefit account.
Like our other ready-made options on pages 7 and 8,
Please also note there are different default arrangements
this option is diversified across asset classes.
for members who hold a Pension account. Refer to the
The chart on the next page shows the investment Transition to Retirement and Pension Account
objective and level of risk for LGIAsuper's MySuper Investment choice guide.
product.
On death or disability
The MySuper option is the default option for LGIAsuper
LGIAsuper will switch your benefit to the Cash
members who have an Accumulation account.
investment option on the date that LGIAsuper is notified
of your death (excludes pensioners who have chosen a
reversionary beneficiary). We do this to protect the
benefit from potential negative investment returns until
we can pay it to your beneficiary/ies or legal personal
representative.
The insurance component of your total and permanent
disablement (TPD) benefit is also invested in the Cash
option.
LGIAsuper INVESTMENT CHOICE GUIDE 5MySuper option
The MySuper option aims for a diversified MySuper option
portfolio of assets expected to generate STRATEGIC ASSET ALLOCATION & RANGES
3% returns per year above inflation after
fees and taxes. It is suited to those seeking
reasonably high returns and able to accept
modest to significant fluctuations in returns
over shorter periods, and has a minimum
suggested holding period of 10 years.
Continue reading to learn more about our wide range of
investment options. SAA % RANGES %
We provide flexibility and choice so you can select the Australian shares 24.0 13 - 37
right option (or combination of options) to suit your needs International shares 28.0 13 - 37
and help you plan for a stronger financial future. Private Capital 5.0 0 - 10
The Standard Risk Measure is based on industry guidance Property 10.0 0 - 20
to allow members to compare investment options that Infrastructure 10.0 0 - 20
are expected to deliver a similar number of negative Diversifying strategies 0.0 0 - 10
annual returns over any 20 year period. Diversified fixed interest 18.0 0 - 50
The Standard Risk Measure is not a complete assessment Cash 5.0 0 - 20
of all forms of investment risk, for instance it does not Growth assets 70.0%
detail what the size of a negative return could be or the Defensive assets 30.0%
potential for a positive return to be less than a member
may require to meet their objectives. Further, it does not RETURN TARGET1
take into account the impact of administration fees and Return target of 3% per year above inflation over rolling
tax on the likelihood of a negative return. 10-year periods after fees and taxes.
Members should still ensure they are comfortable with RISK Medium to High
the risks and potential losses associated with their chosen
investment option/s.
Negative returns expected 3.7 out of every 20 years.
RETURNS
Past performance is not an indicator of future
performance. Returns are at 30 June.
Accumulation (% p.a.)
2021 15.01%
2020 -0.11%
2019 7.05%
2018 9.40%
2017 10.08%
5 Yr compound return 8.17%
5 Yr benchmark return 4.81%
5 Yr comparative return 3.36%
1
Investment markets are uncertain and future returns cannot be guaranteed.
6 LGIAsuper Let's GrowReady-made options
These options are diversified across a mix of asset classes and each is designed to suit a particular type of investor.
Aggressive Diversified Growth Balanced
STRATEGIC ASSET ALLOCATION & STRATEGIC ASSET ALLOCATION & STRATEGIC ASSET ALLOCATION &
RANGES RANGES RANGES
SAA RANGES SAA RANGES SAA RANGES
% % % % % %
Australian shares 30.0 15 - 45 Australian shares 22.5 13 - 37 Australian shares 13.5 0 - 27
International shares 33.0 15 - 45 International shares 27.5 13 - 37 International shares 16.5 0 - 27
Private capital 5.0 0 - 10 Private capital 5.0 0 - 10 Private capital 5.0 0 - 10
Property 9.0 0 - 20 Property 9.0 0 -20 Property 9.0 0 - 20
Infrastructure 11.0 0 - 20 Infrastructure 11.0 0 - 20 Infrastructure 11.0 0 - 20
Diversifying strategies 10.0 0 - 20 Diversifying strategies 5.0 0 - 10 Diversifying strategies 5.0 0 - 10
Diversified fixed interest 0.0 0 - 20 Diversified fixed interest 18.0 0 - 30 Diversified fixed interest 37.0 20 - 50
Cash 2.0 0 - 20 Cash 2.0 0 - 20 Cash 3.0 0 - 20
Growth assets 85% Growth assets 70% Growth assets 50%
Defensive assets 15% Defensive assets 30% Defensive assets 50%
RETURN TARGET1 RETURN TARGET1 RETURN TARGET1
Return target of 3.5% per year above Return target of 3% per year above Return target of 2.5% per year above
inflation over rolling 10-year periods inflation over rolling 10-year periods inflation over rolling 10-year periods
after fees and taxes. after fees and taxes. after fees and taxes.
RISK High RISK Medium to High RISK Medium
Negative returns expected 4.3 out of Negative returns expected 3.5 out of Negative returns expected 2.4 out of
every 20 years. every 20 years. every 20 years.
RETURNS RETURNS RETURNS
Past performance is not an indicator Past performance is not an indicator Past performance is not an indicator
of future performance. Returns are at of future performance. Returns are at of future performance. Returns are at
30 June. 30 June. 30 June.
Accumulation (% p.a.) Accumulation (% p.a.) Accumulation (% p.a.)
2021 19.03% 2021 15.28% 2021 10.05%
2020 -0.10% 2020 0.26% 2020 0.98%
2019 7.75% 2019 7.05% 2019 6.76%
2018 11.23% 2018 9.43% 2018 7.54%
2017 12.90% 2017 10.08% 2017 7.25%
5 Yr compound return 9.98% 5 Yr compound return 8.31% 5 Yr compound return 6.47%
5 Yr benchmark return 5.31% 5 Yr benchmark return 4.81% 5 Yr benchmark return 4.31%
5 Yr comparative return 4.67% 5 Yr comparative return 3.50% 5 Yr comparative return 2.16%
1
Investment markets are uncertain and future returns cannot be guaranteed.
LGIAsuper INVESTMENT CHOICE GUIDE 7These options are diversified across a mix of asset classes and each is designed to suit a particular type of investor.
Stable Defensive
STRATEGIC ASSET ALLOCATION & STRATEGIC ASSET ALLOCATION &
RANGES RANGES
SAA RANGES SAA RANGES
% % % %
Australian shares 8.0 0 - 20 Australian shares 3.0 0 - 15
International shares 12.0 0 - 20 International shares 4.0 0 - 15
Private capital 2.0 0 - 10 Private capital 0.0 0 - 10
Property 8.0 0 - 20 Property 5.0 0 - 15
Infrastructure 10.0 0 - 20 Infrastructure 7.0 0 - 15
Diversifying strategies 5.0 0 - 10 Diversifying strategies 3.0 0 -10
Diversified fixed interest 40.0 20 - 60 Diversified fixed interest 56.0 35 - 75
Cash 15.0 0 - 40 Cash 22.0 0 - 50
Growth assets 37% Growth assets 18%
Defensive assets 63% Defensive assets 82%
RETURN TARGET1 RETURN TARGET1
Return target of 1.5% per year above Return target of 1% per year above
inflation over rolling 10-year periods inflation over rolling 10-year periods
after fees and taxes. after fees and taxes.
RISK Low to Medium RISK Very Low
Negative returns expected 1.4 out of Negative returns expected 0.4 out of
every 20 years. every 20 years.
RETURNS RETURNS
Past performance is not an indicator Past performance is not an indicator
of future performance. Returns are at of future performance. Returns are at
30 June. 30 June.
Accumulation (% p.a.) Accumulation (% p.a.)
2021 6.73% 2021 3.05%
2020 0.92% 2020 1.31%
2019 6.12% 2019 4.69%
2018 5.01% 2018 3.53%
2017 4.90% 2017 2.95%
5 Yr compound return 4.71% 5 Yr compound return 3.10%
5 Yr benchmark return 3.31% 5 Yr benchmark return 2.81%
5 Yr comparative return 1.40% 5 Yr comparative return 0.29%
1
Investment markets are uncertain and future returns cannot be guaranteed.
8 LGIAsuper Let's GrowSingle asset class options
These options can be mixed and matched to build your own investment strategy.
International Shares Australian Shares Property
STRATEGIC ASSET ALLOCATION & STRATEGIC ASSET ALLOCATION & STRATEGIC ASSET ALLOCATION &
RANGES RANGES RANGES
SAA RANGES SAA RANGES SAA RANGES
% % % % % %
Australian shares 0.0 n/a Australian shares 100.0 90 - 100 Australian shares 0.0 n/a
International shares 100.0 90 - 100 International shares 0.0 n/a International shares 0.0 n/a
Private capital 0.0 n/a Private capital 0.0 n/a Private capital 0.0 n/a
Property 0.0 n/a Property 0.0 n/a Property 100.0 90 - 100
Infrastructure 0.0 n/a Infrastructure 0.0 n/a Infrastructure 0.0 n/a
Diversifying strategies 0.0 n/a Diversifying strategies 0.0 n/a Diversifying strategies 0.0 n/a
Diversified fixed interest 0.0 n/a Diversified fixed interest 0.0 n/a Diversified fixed interest 0.0 n/a
Cash 0.0 0 - 10 Cash 0.0 0 - 10 Cash 0.0 0 - 10
Growth assets 100% Growth assets 100% Growth assets 75%
Defensive assets 0% Defensive assets 0% Defensive assets 25%
RETURN TARGET1,2 RETURN TARGET1,2 RETURN TARGET1,2
Return target is to outperform the Return target is to outperform the Return target is to outperform the
adjusted MSCI All Countries World adjusted S&P/ASX 300 Accumulation adjusted Mercer/IPD Australian
Index over rolling 5-year periods after Index over rolling 5-year periods after Property Index over rolling 5-year
fees and taxes. fees and taxes. periods after fees and taxes.
RISK High RISK Very High RISK Medium to High
Negative returns expected 5.6 out of Negative returns expected 6.1 out of Negative returns expected 3.4 out of
every 20 years. every 20 years. every 20 years.
RETURNS RETURNS RETURNS
Past performance is not an indicator Past performance is not an indicator Past performance is not an indicator
of future performance. Returns are at of future performance. Returns are at of future performance. Returns are at
30 June. 30 June. 30 June.
Accumulation (% p.a.) Accumulation (% p.a.) Accumulation (% p.a.)
2021 28.13% 2021 27.80% 2021 7.49%
2020 3.31% 2020 -8.21% 2020 -3.46%
2019 8.58% 2019 7.97% 2019 7.67%
2018 10.37% 2018 14.89% 2018 9.24%
2017 18.10% 2017 9.65% 2017 7.51%
5 Yr compound return 13.38% 5 Yr compound return 9.80% 5 Yr compound return 5.58%
5 Yr benchmark return 11.52% 5 Yr benchmark return 11.15% 5 Yr benchmark return 6.37%
5 Yr comparative return 1.86% 5 Yr comparative return -1.35% 5 Yr comparative return -0.79%
1
Investment markets are uncertain and future returns cannot be guaranteed.
2
Return targets are adjusted for taxes, administration fees and costs and investment fees and costs.
LGIAsuper INVESTMENT CHOICE GUIDE 9These options can be mixed and matched to build your own investment strategy.
Diversified Fixed Interest Cash
STRATEGIC ASSET ALLOCATION & STRATEGIC ASSET ALLOCATION &
RANGES RANGES
SAA RANGES SAA RANGES
% % % %
Australian shares 0.0 n/a Australian shares 0.0 n/a
International shares 0.0 n/a International shares 0.0 n/a
Private capital 0.0 n/a Private capital 0.0 n/a
Property 0.0 n/a Property 0.0 n/a
Infrastructure 0.0 n/a Infrastructure 0.0 n/a
Diversifying strategies 0.0 n/a Diversifying strategies 0.0 n/a
Diversified fixed interest 100.0 90 - 100 Diversified fixed interest 0.0 n/a
Cash 0.0 0 - 10 Cash 100.0 n/a
Growth assets 0% Growth assets 0%
Defensive assets 100% Defensive assets 100%
RETURN TARGET1,2 RETURN TARGET1,2
Return target is to outperform 70% Return target is to outperform the
adjusted Bloomberg AusBond adjusted Bloomberg AusBond Bank
Composite Bond Index (All Maturities) Bill Index over rolling 1-year periods
plus 30% adjusted Bloomberg after fees and taxes.
Barclays Global Aggregate Index
(hedged to Australian Dollars) over
rolling 3-year periods after fees and
taxes.
RISK Medium RISK Very Low
Negative returns expected 2.1 out of Negative returns expected 0.0 out of
every 20 years. every 20 years.
RETURNS RETURNS
Past performance is not an indicator Past performance is not an indicator
of future performance. Returns are at of future performance. Returns are at
30 June. 30 June.
Accumulation (% p.a.) Accumulation (% p.a.)
2021 1.46% 2021 0.46%
2020 3.47% 2020 0.85%
2019 5.77% 2019 1.66%
2018 2.06% 2018 1.71%
2017 0.82% 2017 1.72%
5 Yr compound return 2.70% 5 Yr compound return 1.28%
5 Yr benchmark return 2.52% 5 Yr benchmark return 1.06%
5 Yr comparative return 0.18% 5 Yr comparative return 0.22%
1
Investment markets are uncertain and future returns cannot be guaranteed.
2
Return targets are adjusted for taxes, administration fees and costs and investment fees and costs.
10 LGIAsuper Let's GrowSocially responsible options
These options take into account socially responsible or ethical criteria. Our approach to ethical investments is outlined
on 12, including the criteria used when making investment decisions.
SR Balanced SR Australian Shares
STRATEGIC ASSET ALLOCATION & STRATEGIC ASSET ALLOCATION &
RANGES RANGES
SAA RANGES SAA RANGES
% % % %
Australian shares 29.0 20 - 50 Australian shares 100.0 90 - 100
International shares 36.0 20 - 50 International shares 0.0 n/a
Private capital 0.0 0-6 Private capital 0.0 n/a
Property 0.0 0 - 20 Property 0.0 n/a
Infrastructure 0.0 0-7 Infrastructure 0.0 n/a
Diversifying strategies 15.0 0 - 20 Diversifying strategies 0.0 n/a
Diversified fixed interest 15.0 0 - 50 Diversified fixed interest 0.0 n/a
Cash 5.0 0 - 20 Cash 0.0 0 - 10
Growth assets 73% Growth assets 100%
Defensive assets 27% Defensive assets 0%
RETURN TARGET1,2 RETURN TARGET1,2
Return target of 3% per year above Return target is to outperform the
inflation over rolling 10-year periods S&P/ASX 200 Accumulation Index
after fees and taxes. over rolling 5-year period after fees
and taxes.
RISK High RISK Very High
Negative returns expected 4.7 out of Negative returns expected 6.1 out of
every 20 years. every 20 years.
RETURNS RETURNS
Past performance is not an indicator Past performance is not an indicator
of future performance. Returns are at of future performance. Returns are at
30 June. 30 June.
Accumulation (% p.a.) Accumulation (% p.a.)
2021 19.96% 2021 25.90%
2020 -1.46% 2020 -8.56%
2019 6.32% 2019 11.19%
2018 7.56% 2018 11.97%
2017 7.23% 2017 10.23%
5 Yr compound return 7.71% 5 Yr compound return 9.58%
5 Yr benchmark return 4.81% 5 Yr benchmark return 11.15%
5 Yr comparative return 2.90% 5 Yr comparative return -1.57%
1
Investment markets are uncertain and future returns cannot be guaranteed.
2
Return targets are adjusted for taxes, administration fees and costs and investment fees and costs.
LGIAsuper INVESTMENT CHOICE GUIDE 11Our approach to ethical investments
LGIAsuper’s investment philosophy is LGIAsuper requires investment managers to make share
investments that screen out companies or sectors, or
primarily focused on generating
support industries, taking into account:
investment returns and managing risk.
environmental grounds, for example, energy and
LGIAsuper does not believe it is appropriate to limit the resource use
types of investments it considers based on its ethical
social considerations such as indigenous relations and
views. Instead, LGIAsuper offers you two dedicated
community involvement
Socially Responsible investment options so that you can
make your own investment decision. ethical considerations, including meeting fundamental
human rights and articulating and implementing a
LGIAsuper recognises that environmental, social and Code of Conduct
governance factors or labour standards can potentially labour standards, for example, occupational health
have a positive impact on investment returns and/or and safety, International Labour Organisation
investment risk over the long term. standards, working considerations and the exclusion
However, we do not believe the additional cost and of child labour
complexity of including these considerations as a major governance considerations, such as meeting corporate
input into the setting or implementation of the governance guidelines on board structures and
investment strategy can be justified, particularly for remuneration
passively managed investments. avoiding investments in companies that operate in
LGIAsuper’s asset consultant will consider environmental, sectors with recognised high negative social impact,
social and governance factors in its fund manager ratings including companies that derive a significant portion
to the extent that these factors influence the risk and of their total revenue from the production or
return objectives. manufacture of alcohol, armaments, gambling,
pornography, tobacco and uranium.
Socially Responsible options
LGIAsuper may select investment managers that apply
The two Socially Responsible options, SR Balanced and these considerations to other asset classes, such as
SR Australian Shares, are the only investment options to property, or investment managers that apply socially
take into account labour standards or environmental, responsible considerations in addition to the
social or ethical considerations when making investment environmental, social and governance considerations
decisions. outlined above.
For more detailed information on the Socially Responsible
options, please contact us on 1800 444 396.
12 LGIAsuper Let's GrowMaking your choice
If you are ready to make an investment Can I choose how my future contributions and transfers
from other super funds will be invested?
choice, this section gives you more detail
Yes, however it’s important to review your investment
on how you can put your choice into
strategy regularly, as the different options you have will
action and the rules that apply. grow at different earning rates, with different levels of
Have you considered… volatility.
the likely investment return of your chosen investment How often can I switch?
option/s? You can switch investment options as many times as
the level of risk you are taking? you wish during the financial year. Only one investment
how long you are investing for? switch will be accepted for an account on any given day.
if you’re selecting more than one investment option, LGIAsuper reserves the right to limit the number of
the overall asset allocation and risk profile the investment switch requests received from a member
combination of options will produce? where the number submitted is considered
unreasonable.
You may want to seek financial advice before switching
investment options. LGIAsuper’s financial advisers can Remember that super is generally a long-term
provide advice on a single issue such as investment investment, and by changing investment options often
options at no additional cost. you might reduce your overall investment return. There
is no fee to switch between investment options.
Call 1800 444 396 to request an appointment or to
receive more information. When will my switch take effect?
If we receive your completed form or online switch by
5pm (AEST) on a business day, your switch will take
effect from the next business day after we receive your
Get the latest earning rates from the instructions.
Investments section of our website A business day is defined as a day between Monday and
lgiasuper.com.au. Friday which is not an Australian national public holiday.
Processing withdrawals and/or switches may be
suspended for up to 7 days or longer during periods of
significant market volatility or other conditions that
prevent LGIAsuper from determining earning rates. See
How do I switch?
the About Earning Rates section for details on how
Online earning rates work.
To review your investments or change how your super
Can I cancel my switch?
is invested without the need to complete and return
documents, log in to Member Online at lgiasuper.com.au. If you change your mind, your switch can be cancelled
as long as we receive your cancellation by 5pm (AEST)
Switching investments online is the easiest way to make on the day your instruction was submitted.
a switch and ensures your switch will be effective from
the next business day. This may provide additional Online switch: if you have made an investment switch
assurance to members who are making an investment online you can cancel your switch directly through
switch during volatile market conditions. Member Online.
If you are not registered for Member Online, simply go Paper switch: if you completed an Investment switch
to the website, choose Member login at the top of the form, you should cancel your switch in writing by email.
page and then Register. You’ll need your member
number.
On paper
Simply complete the Investment switch form available
at lgiasuper.com.au/forms.
When switching investments using the Investment switch
form your switch will not be effective until the form is
received and processed by LGIAsuper. This may cause
a delay between the date you have submitted the form
and the date your switch takes place.
Can I choose more than one investment option?
Yes, however the different options you have will grow
at different earning rates, with different levels of
volatility. You should review your investment strategy
regularly.
LGIAsuper INVESTMENT CHOICE GUIDE 13About earning rates
An earning rate is the net investment return (after fees and tax) that applies to your account at the end of each
financial year. It can be positive or negative.
Earning rates are declared by the LGIAsuper Trustee for each investment option and are based on the investment
return achieved by the underlying assets for that option.
Earning rates are used when you withdraw money from LGIAsuper or switch investment options.
Earning rates are calculated and compound on a daily basis based on the unit prices calculated by the Fund's
Custodian. These rates reflect the unit prices and investment returns from 1 business day earlier. For example, Monday’s
investment returns are applied effective on the following Tuesday.
Switching investment options and the timings involved
SWITCH REQUEST
NEXT BUSINESS DAY SECOND BUSINESS DAY
RECEIVED DAY
Investment switch request Investment switch request Transaction viewable in
RECEIVED PROCESSED MEMBER ONLINE
Your switch request needs to The date your switch request You will receive confirmation
be received by LGIAsuper on was processed will be on the via email or post. You will also
a business day before 5.00pm next business day that your be able to see the transaction
(AEST). Requests submitted request was received. The and the earning rate applied
after 5.00pm (AEST) will be earning rate applied will be on your account in Member
considered as received on the the rate for the date the Online. The earning rates
next business day. The easiest switch was processed applied to your switch will
way to make a switch is on (reflecting the previous also be viewable on
Member Online. business day’s market values). LGIAsuper’s website.
Switch Switch
request request Switch request processed day Viewable in Member Online
submitted received day
Wednesday (Wednesday’s
Tuesday 3pm Tuesday Thursday
earning rate)
Thursday (Thursday’s earning
Tuesday 6pm Wednesday Friday
rate)
Saturday/
Tuesday (Tuesday’s earning
Sunday Monday Wednesday
rate)
(anytime)
Monday
Wednesday (Wednesday’s
(Public Tuesday Thursday
earning rate)
Holiday*)
* Excludes Queensland public holidays and the Queen's Birthday.
14 LGIAsuper Let's GrowFees and other costs
This section shows fees and other costs
that you may be charged. Did you know?
Small differences in both investment performance
These fees and other costs may be deducted from your
and fees and costs can have a substantial impact
money, from the returns on your investment or from the
on your long-term returns. For example, total
assets of the superannuation entity as a whole.
annual fees and costs of 2% of your account
Other fees, such as activity fees, advice fees for personal balance rather than 1% could reduce your final
advice and insurance fees, may also be charged, but return by up to 20% over a 30-year period
these will depend on the nature of the activity, advice (reduce from $100,000 to $80,000).
or insurance chosen by you. You should consider whether features such as
Taxes, insurance premiums and other costs relating to superior investment performance or the provision
insurance are set out in the relevant Product Disclosure of better member services justify higher fees and
Statement for your account. costs. Your employer may be able to negotiate to
pay lower administration fees. Ask the fund or
You should read all the information about fees and other your financial adviser.
costs because it is important to understand their impact
To find out more
on your investment.
If you would like to find out more or see the impact
The fees and other costs for each investment option of the fees based on your own circumstances, the
offered by LGIAsuper, are set out on the following pages. Australian Securities and Investments
Commission (ASIC) website
(www.moneysmart.gov.au) has a superannuation
calculator to help you check out different fee
options.
READY-MADE OPTIONS
Type of fee
Diversified
Aggressive Balanced Stable Defensive
Growth
Investment
0.29%2 p.a. 0.26%2 p.a. 0.24%2 p.a. 0.19%2 p.a. 0.17%2 p.a.
fee1
Administration fee1,4 0.18% p.a.
Buy-sell spread Nil
Switching fee Nil
Advice fees Nil
Other fees and You should read the important information about other fees and costs on the Fees and costs section of our
costs5 website before making a decision. Go to lgiasuper.com.au/fees.
Indirect cost 0.41%3 p.a. 0.45%3 p.a. 0.40%3 p.a. 0.30%3 p.a. 0.20%3 p.a.
ratio
1
If your account balance for a product is less than $6,000 at the end of the financial year, the total combined amount of administration
fees, investment fees and indirect costs charged to you is capped at 3% of the account balance. Any amount charged in excess of
that cap will be refunded.
2
Estimates only.
3
Based on actual costs incurred and estimates where actual costs have not yet been incurred.
4
The administration fee is capped at $900 per year for eligible accounts.
5
Additional fees may apply such as for consulting an adviser if you chose to do so.
LGIAsuper INVESTMENT CHOICE GUIDE 155.0%*
OWNERSHIP
Grupo T-Solar
- Leading independent solar power
generation company located in India,
Italy, Japan, Peru, Spain and USA.
- D
emand for renewable resources
is growing and LGIAsuper earns
predictable revenue from solar
energy sources.
*As at 30 September 2020.
SINGLE ASSET CLASS OPTIONS SOCIALLY RESPONSIBLE
How and when paid
Diversified
International Australian SR SR Australian
Property Fixed Cash
Shares Shares Balanced Shares
Interest
Deducted from investment
0.03%2
0.36%2 p.a. 0.34%2 p.a. 0.13%2 p.a. 0.21%2 p.a. 0.08%2 p.a. 0.42%2 p.a. earnings as they are applied
p.a. to your account.
The administration fee is
deducted from investment
earnings as they are applied
0.18% p.a. to your account.
Nil Not applicable.
Nil Not applicable.
Nil Not applicable.
0.00%3 Not applicable.
0.16%3 p.a. 0.09%3 p.a. 0.92%3 p.a. 0.04%3 p.a. 1.41%3 p.a. 0.12%3 p.a.
p.a.
16 LGIAsuper Let's GrowExamples of annual fees and costs
This table gives an example of how the fees and costs for the Balanced investment option can affect your
superannuation investment over a 1-year period. You should use this table to compare the Balanced investment
option with other superannuation products.
Example Balance of $50,000
For every $50,000 you have in the Balanced investment option
Investment fees 0.24%1 p.a.
you will be charged $120 each year
And, an administration fee of $90 will be deducted from
PLUS Administration fees 0.18% p.a. investment earnings for every $50,000 you have invested in
the Balanced investment option
PLUS Indirect costs for And, indirect costs of $200 will be deducted from your
0.40%1 p.a.
the Balanced investment option2 investment earnings
If your balance was $50,000, then for that year you will be
EQUALS Cost of product 0.82% p.a.
charged fees of $4102 for the Balanced investment option.
1
Estimated costs only.
2
Additional fees may apply such as for consulting an adviser if you choose to do so.
LGIAsuper INVESTMENT CHOICE GUIDE 17Additional explanation of fees and costs
This section shows fees and other costs Financial advice fee
that you may be charged. LGIAsuper does not charge for general or single issue
personal advice provided over the phone.
Administration fees
If you require broader or more complex superannuation
The administration fee is charged by the Trustee to cover
advice, fees will apply. The fee will vary depending on
administration costs and expenses. The administration
the type and complexity of personal advice you require
fee is deducted from investment earnings as they are
and will be confirmed with you during your obligation
applied to your account.
free appointment.
LGIAsuper claims a tax deduction each year for the costs
The fee charged for advice that relates to your
that relate to the administration of the fund. The amount
superannuation can potentially be deducted from your
of the tax deduction for the administration costs is paid
LGIAsuper account. Your adviser will explain if this option
into the General Reserve. LGIAsuper maintains a General
is available to you. Alternatively an invoice will be
Reserve to ensure there are sufficient funds to meet
provided.
current and future liabilities for administration costs,
strategic initiatives and operational risks. We use this Advice fees regarding matters unrelated to your
account to pay the administrator's fees and any other LGIAsuper account cannot be deducted from your
administration and operating expenses of the trustee or LGIAsuper account and will be invoiced separately.
fund. Any excess retained in the account is ultimately The fees will be explained to you in detail.
applied for the benefit of the membership as a whole.
Indirect costs
Administration fee rebate
Indirect costs are any amounts that we know, or
The administration fee of 0.18% is subject to a limit of reasonably ought to know, will directly or indirectly
$900 in a financial year. If the total of your eligible reduce the return on your investments that are not
account balances at the end of the financial year exceeds charged to your account as a fee, such as transactional
$500,000, any fee above $900 will be rebated to your and operational costs, costs of derivatives and
account in the following financial year. All your account management costs charged by interposed vehicles.
balances are eligible except for the defined benefit
portion of a Defined Benefit account. The Indirect costs in the table on page 16 and 17 are
based on actual costs incurred and estimates where
If you hold more than one LGIAsuper account at the time actual costs have not yet been incurred.
the rebate is applied, it will be paid in direct proportion
to the account balance at that time.
Performance fees
Performance fees are paid to some investment managers
when they outperform a set benchmark.
These fees are calculated by comparing the difference
between the benchmark and actual performance for
each investment, and multiplying the out performance
by the performance bonus rate payable. Performance
fees have been estimated and included in the investment
fees on page 16 and 17.
Fee changes
Administration and Investment fees cover the actual
costs of administration and investment management
paid out of LGIAsuper and, as such, may vary from year
to year. The actual investment fees deducted from
investment earnings each financial year are reported to
you in the Annual Report to members.
Before the start of each financial year LGIAsuper
estimates the Investment fees for the year ahead and
these estimates only change where necessary to ensure
costs are covered.
LGIAsuper reserves the right to make changes to the
fees and costs charged without your prior consent. If a
change results in an increase in the fees and costs
charged, you will be notified at least 30 days' prior to
the change taking place.
Advice fees
The cost of providing general advice is included in the
Administration fees charged to LGIAsuper members.
18 LGIAsuper Let's GrowTransactional and operational costs Borrowing costs
The transactional and operational expenses of investing, LGIAsuper does not borrow money but we invest in fund
such as brokerage, stamp duty, property operating costs managers that borrow money to facilitate the purchase
and buy-sell spreads where applicable, are included in of certain investments, such as real property and
the Indirect costs and Indirect cost ratio in the fees and infrastructure. These costs are recovered from the
costs table. earnings of the assets purchased with the borrowings.
Borrowing costs are not included in any of the fees and
TRANSACTIONAL AND costs outlined here and are an additional cost to
OPERATIONAL COSTS members.
INVESTMENT OPTION
INCLUDED IN INDIRECT
COSTS
BORROWING COSTS NOT
MySuper Option 0.03% INVESTMENT OPTION INCLUDED IN THE
INDIRECT COSTS
Aggressive 0.03%
MySuper Option 0.12%
Diversified Growth 0.03%
Aggressive 0.12%
Balanced 0.04%
Diversified Growth 0.12%
Stable 0.04%
Balanced 0.12%
Defensive 0.03%
Stable 0.11%
International Shares 0.00%
Defensive 0.06%
Australian Shares 0.00%
International Shares 0.00%
Property 0.22%
Australian Shares 0.00%
Diversified Fixed Interest 0.03%
Property 0.76%
Cash 0.00%
Diversified Fixed Interest 0.00%
SR Balanced 0.00%
Cash 0.00%
SR Australian Shares 0.00%
SR Balanced 0.05%
No transactional and operational costs are charged
directly to your account. SR Australian Shares 0.00%
LGIAsuper INVESTMENT CHOICE GUIDE 19Defined fees
Activity fees a. fees in payment for the exercise of care and expertise
A fee is an activity fee if: in the investment of those assets (including
performance fees); and
a. the fee relates to costs incurred by the trustee of the b. costs that relate to the investment of assets of the
superannuation entity that are directly related to an entity, other than:
activity of the trustee:
i. borrowing costs; and
i. that is engaged in at the request, or with the
ii. indirect costs that are not paid out of the
consent, of a member; or
superannuation entity that the trustee has elected
ii. that relates to a member and is required by law; in writing will be treated as indirect costs and not
and fees, incurred by the trustee of the entity or in an
b. those costs are not otherwise charged as an interposed vehicle or derivative financial product;
administration fee, an investment fee, a and
buy-sell spread, a switching fee, an advice fee or an iii. costs that are otherwise charged as an
insurance fee. administration fee, a buy-sell spread, a switching
Administration fees fee, an activity fee, an advice fee or an insurance.
An administration fee is a fee that relates to the Switching fees
administration or operation of the superannuation entity A switching fee for a superannuation product is a fee to
and includes costs that relate to that administration or recover the costs of switching all or part of a member’s
operation, other than: interest in the superannuation entity from one investment
a. borrowing costs; and option or product in the entity to another.
b. indirect costs that are not paid out of the
superannuation entity that the trustee has elected in
writing will be treated as indirect costs and not fees,
incurred by the trustee of the entity or in an
interposed vehicle or derivative financial product; and
c. costs that are otherwise charged as an investment
fee, a buy-sell spread, a switching fee, an activity
fee, an advice fee or an insurance fee.
Advice fees
A fee is an advice fee if:
a. the fee relates directly to costs incurred by the trustee
of the superannuation entity because of the provision
of financial product advice to a member by:
i. a trustee of the entity; or
ii. another person acting as an employee of, or under
an arrangement with, the trustee of the entity;
and
b. those costs are not otherwise charged as an
administration fee, an investment fee, a switching fee,
an activity fee or an insurance fee.
Buy-sell spreads
A buy-sell spread is a fee to recover transaction costs
incurred by the trustee of the superannuation entity in
relation to the sale and purchase of assets of the entity.
Indirect cost ratio
The Indirect cost ratio (ICR), for an investment option
offered by a superannuation entity, is the ratio of the
total of the indirect costs for the investment option, to
the total average net assets of the superannuation entity
attributed to the investment option.
Investment fees
An investment fee is a fee that relates to the investment
of the assets of a superannuation entity and includes:
20 LGIAsuper Let's GrowLet us help you achieve a stronger financial future
Our team of trusted, reliable and
professional staff are dedicated to helping To start the conversation
LGIAsuper members like you plan for a contact us on 1800 444 396
better financial future. or email info@lgiasuper.com.au
Our staff are here to show you how our products and
services can work in your favour and give you
information or advice to help you make the right
decisions about your retirement however far away it
might be.
LGIAsuper’s staff are paid a salary and do not receive
commissions, fees or bonuses for the information or
advice they give you.
LGIAsuper INVESTMENT CHOICE GUIDE 21Level 20, 333 Ann Street Brisbane Qld 4000 GPO Box 264 Brisbane Qld 4001
Telephone: 1800 444 396 From overseas +61 7 3244 4300 Fax 07 3244 4344
info@lgiasuper.com.au lgiasuper.com.au
SUPERANNUATION INVESTMENT ADVICE INSURANCE
LGIAsuper Trustee (ABN 94 085 088 484 AFS Licence No. 230511) as trustee for LGIAsuper (ABN ABN 23 053 121 564)You can also read
