IPS fact sheet 1:
IOOF Portfolio Service
IOOF Portfolio Service Personal Superannuation, Allocated Pension & Term Allocated Pension Issued 19 November 2009
Your investment strategy You may choose from a range of investment options
within the following sections
This fact sheet is designed to provide you with
information about the range of available investment • Easy Choice
strategies that you can select. Offers you access to a spread of different asset classes
Making the right investment choice is an important part designed to meet particular investment objectives.
of developing a plan to help you achieve your retirement IOOF multi-manager Diversified and Sectoral
and investment goals. This requires careful consideration Trusts simplify the investment selection process by
of a number of factors including your retirement needs/ combining the ‘best of the best’ manager blends to
financial goals, your investment risk and return profile suit your investment objectives.
and your overall financial position. • Investor Choice
We recommend that you discuss your investment This is where you and your financial adviser can tailor
strategy with a financial adviser. the investments to suit your investment strategy.
Investor Choice allows you to select from a wide range
of managed funds and term deposits.
You choose what is right for you
• Direct Share Choice
As your individual circumstances change over time,
your investment strategy may also need to change to Offers you access to over 60 different shares selected
accommodate any new goals or objectives. from the top 150 companies listed on the ASX based
upon market capitalisation.
The investment strategy that best suits your needs will
depend on a number of personal factors, such as your: The list of Easy Choice and Investor Choice investment
• attitude towards investment risk and return; options is set out in IPS fact sheet 2: IOOF Portfolio
Service investment options menu. The process
• investment timeframe; and
undertaken by the Trustee in establishing the investment
• income needs. menu is explained in the PDS.
The list of listed securities is available on our web site
What investment options can I choose? (www.ioof.com.au). This list may change from time
The range of investment options available includes: to time.
• term deposits;
• diversified managed funds that invest across a range
of different asset classes (e.g. Balanced funds), specific
asset class or sector managed funds (e.g. Australian
• over 60 different shares selected from the top 150
companies listed on the ASX based upon market
IOOF Portfolio Service investment strategies 2
Investment limits Diversification
➜ To maintain liquidity and diversification in your account, Diversification is a common investment technique used
the Trustee has set limits on the amount of your account to manage investment risk. You can diversify investments
balance which can be allocated to particular investment within an asset class, diversify investments across
options. The limits are set out in the table below and are different asset classes or diversify investments across
only assessed at the time an investment is made. different investment managers.
The Trustee will not monitor these limits on an ongoing A financial adviser can help you understand the
basis and will generally not sell down investment options relationship between risk and return and the possible
if these limits are exceeded, other than where necessary to advantages of diversification.
maintain liquidity in your account or for any other reason IOOF multi-manager Trusts
where the Trustee determines the sale to be in your best IOOF recognises the importance and expertise required in
interests or the best interests of the Fund as a whole. managing investments through all investment cycles. We
Investment option Investment limit believe a multi-manager approach provides investors with
an expertly managed portfolio incorporating the latest in
Restricted 30% of your account balance in investment, strategic and economic information. Our multi-
investments each investment option or in each manager Trusts simplify the investment selection process
Investment Category, with not by accessing a team of investment professionals who are
more than 70% of your account dedicated to identifying, blending and managing specialist
balance invested in restricted investment managers to improve returns for investors.
Managing risk through diversification
Term deposits 80% of your account balance.
IOOF multi-manager Trusts aim to maximise returns for a
Listed securities 30% of your account balance in given level of risk and take diversification that extra step by:
each listed security, with not more
than 80% of your account balance • investing in multiple asset sectors, e.g. international
invested in listed securities. and Australian shares, property, alternative strategies,
fixed interest securities and cash;
• investing the assets of each portfolio with multiple
About Investment investment managers which have been carefully
Your investment risk and return profile selected; and
Your investment risk and return profile will affect your • blending multiple investment styles within a single fund.
investment strategy. Generally, the higher the level of
Labour standards, environmental, social and ethical
risk you are prepared to accept, the higher the potential
return you can expect from the investment. For example,
investing in shares may provide the highest potential Different investment managers have different policies
return over the longer term, but may also have the regarding the extent to which they take into account
highest risk of capital loss in the short-term. Cash tends labour standards, environmental, social or ethical
to have a small chance of capital loss, but its investment considerations. Information regarding these policies will
returns may be lower. be disclosed in the product disclosure statement of the
As Trustee of the Fund, we do not currently take into
account labour standards, environmental, social or ethical
considerations when selecting investment managers or
selecting, retaining or removing managed funds from the
list of available investments.
IOOF multi-manager Trusts Alternative Equity
offer a range of options across Total Growth
the risk/return spectrum. Hi Growth
Enhanced Alternative Debt
Diversified Fixed Interest
Defensive Growth Not offered
Assets Assets as individual
Cash/Liquids MultiMix Trusts
Lower risk Higher risk ➜
IOOF Portfolio Service investment strategies 3
➜ IOOF diversified multi-manager investment categories
Conservative Balanced Growth
Investment To provide consistent returns To provide moderate growth To provide moderate to high
objective over the medium to long-term over the medium to long-term growth over the long-term
through high exposure to through a balanced exposure through high exposure to
defensive assets. to growth and defensive assets. growth assets.
Investment To invest predominantly in To invest in a diversified To invest predominantly in a
strategy defensive assets such as fixed portfolio providing a balanced diversified range of Australian
interest and cash investments. exposure to the major asset and international shares
Some capital growth is classes such as cash, fixed and property with a small
provided through a small interest securities, shares and exposure to income producing
exposure to growth assets such property. investments.
as shares and property.
Factors Volatility in interest rates Returns in the short-term may Returns in the short-term may
influencing may cause the value of the be somewhat volatile and will be volatile and will be affected
investment fixed interest investments to be affected by movements by movements in global and
returns fluctuate. in global and local share local share markets, property
markets, property values as values as well as movements in
well as movements in foreign foreign currencies.
Asset allocation Growth assets: 0% — 40% Growth assets: 40% — 70% Growth assets: 70% — 100%
ranges* Defensive assets: 60% — 100% Defensive assets: 30% — 60% Defensive assets: 0% — 30%
Risk Low to medium Medium to high High
Return Low to medium Medium to high High
Typical investment 2 to 3 years 5 to 7 years 7 years or more
A negative annual Once in every 10 years Once in every 7 years Once in every 6 years
return is not
Typical investor Investors seeking a Investors seeking a balanced Investors seeking superior
conservative portfolio with exposure to growth and long-term returns and who are
some exposure to growth defensive assets and who are prepared to tolerate short-term
assets. prepared to tolerate short-term volatility.
* Growth assets include more volatile and higher risk assets that are expected to have higher growth potential over the
longer term such as Australian and international shares and listed property trusts. Defensive assets include assets that are
expected to have lower returns and lower volatility as they tend to have less risk such as cash, corporate bonds and other
Australian and international fixed interest investments.
IOOF Portfolio Service investment strategies 4
Easy Choice (cont.)
➜ IOOF sectoral multi-manager investment categories
Cash Fixed Interest Australian Shares Global Shares
Investment To provide a high To provide a return that is To produce high To produce high
objective degree of security higher than the available returns over the returns over the
and stability, while cash rates through long-term. long-term.
delivering returns holdings of a diversified
that are consistent portfolio of fixed interest,
with the prevailing mortgage and enhanced
market cash rates. yield securities.
Investment To invest in a range To invest in either To invest To invest
strategy of short-term Australian and/or predominantly in predominantly in
interest-bearing international Government, listed Australian shares listed on
securities including semi-Government, and shares in a variety stock exchanges in
bank bills, bank corporate fixed interest of market sectors a range of countries
deposits, Government, securities as well as by combining by combining
corporate and inflation-linked bonds, different investment different investment
mortgage-backed mortgage securities and managers, and managers, and
securities by money market assets styles within a styles within a
combining different by combining different single asset class. single asset class.
investment managers, investment managers,
and styles within a and styles within a single
single asset class. asset class.
Factors Movements in The value of fixed Returns are affected Returns in the short-
influencing short-term interest interest investments is by movements in term may be volatile
investment rates will affect linked to the market, the share market and will be affected
returns investment returns. and therefore they may and may be volatile by movements in
lose value in periods in the short-term. global share markets
where interest rates rise Returns may also as well as movements
and correspondingly be affected by the in foreign currencies.
gain value in times of level of gearing and
decreasing interest rates. whether any short-
Currency movements selling strategies are
may also have an impact employed by the
on international fixed investment manager.
Risk Very low Low to medium High High
Return Very low Low to medium High High
Typical investment 1 year 3 to 5 years 5 to 7 years 5 to 7 years
A negative annual Negligible risk Once in every 8 years Once in every 4 years Once in every 4 years
return is not
Typical investor Investors seeking Investors seeking returns Investors seeking Investors seeking
absolute security of higher than that available long-term long-term
capital. from cash. investments who investments who
are prepared to are prepared to
accept short-term accept short-term
fluctuation in returns. fluctuation in returns.
IOOF Portfolio Service investment strategies 5
➜ Investment categories
Cash Australian Fixed Interest Global Fixed Interest Australian Shares
Investment To provide a high To provide a return that is To provide exposure To produce high
objective degree of security higher than the available to global fixed interest returns over the
and stability, while cash rates through securities and provide long-term.
delivering returns holdings of a diversified higher than available cash
that are consistent portfolio of Australian rates through holdings of
with the prevailing fixed interest and diversified fixed interest and
market cash rates. mortgage securities. enhanced yield securities.
Investment To invest in a range To invest in either To invest in either Foreign To invest
strategy of short-term Australian Government, Government, semi- predominantly in
interest-bearing semi-Government, and Government, and corporate listed Australian
securities including corporate fixed interest fixed interest securities shares in a variety
bank bills, securities as well as as well as inflation-linked of market sectors.
bank deposits, inflation-linked bonds, bonds, mortgage securities,
Government, mortgage securities, high High yielding securities and
corporate and yielding securities and money market assets.
mortgage-backed money market assets.
Factors Movements in The value of fixed The value of investments in Returns are
influencing short-term interest interest investments is this category may lose value affected by
investment rates will affect linked to the market, in periods where interest rates movements in the
returns investment returns. and therefore they may rise and correspondingly gain share market and
lose value in periods value in times of decreasing may be volatile
where interest rates rise interest rates. in the short-term.
and correspondingly In addition, the credit Returns may also
gain value in times of quality of the securities be affected by the
decreasing interest rates. and liquidity of the market level of gearing
Other factors such as is also an important factor and whether
liquidity and credit risk in influencing investment any short-selling
play a part in the value of returns. strategies are
fixed interest securities. employed by
Currency movements may
also have an impact on
international securities returns.
Sub-category · Cash · Mortgages · Diversified · Large Companies
Management · Bonds · Enhanced Yields · Small Companies
· Term Deposits · Enhanced Yields · Specialist
· Cash Enhanced
Risk Very low Low to medium Low to medium High
Return Very low Low to medium Low to medium High
Typical investment 1 year 3 to 5 years 3 to 5 years 5 to 7 years
A negative annual Negligible risk Once in every 8 years Once in every 8 years Once in every
return is not 4 years
Typical investor Investors seeking Investors seeking Investors seeking Investors seeking
absolute security returns higher than that returns higher than that long-term
of capital. available from cash. available from cash. investments who
are prepared to
IOOF Portfolio Service investment strategies 6
Investor Choice (cont.)
➜ Investment categories
Global Shares Property Infrastructure Commodities
Investment To produce high To provide a To produce a balance To gain exposure
objective returns over the combination of of income and medium to commodity
long-term. income and growth to long-term capital related returns and
over the long-term. growth. diversification of portfolio
risk. Over the long-term,
returns tend to be higher
than bonds and close to
Investment To invest To invest To invest in To invest in
strategy predominantly in predominantly in Australian and commodity-linked
shares listed on stock property investments overseas derivatives, commodity
exchanges in a range and listed property infrastructure exposed industries and
of countries. trusts within Australian securities. funds benchmarked to
and international commodity indices.
Factors Returns in the Returns will be affected Factors which will Commodity returns
influencing short-term may by movements in influence returns move in line with the
investment be volatile and property values and from infrastructure world economic cycle.
returns will be affected by in the case of listed investments include In times of economic
movements in global property trusts, risks in development, growth, demand for
share markets as well by movements in construction and commodities is generally
as movements in the share market. under-usage of assets. stronger, and the
foreign currencies. Movements in both Also, the level of gearing reverse is true. Being
short and long-term an infrastructure real assets, commodity
interest rates will also trust will take on will prices and returns are
affect investment influence returns. More linked to inflation, and
returns. gearing, the greater the rise when inflation rises.
Currency movements potential return for a Commodities can serve
may also have an greater risk. as a hedge against
impact on international inflation.
Sub-category · Large Companies · Australian Property · Australian n/a
(Hedged) (Listed) Infrastructure (Listed)
· Large Companies · Australian Property · Global Infrastructure
(Unhedged/Active (Hybrid/Direct) (Hybrid/Direct)
Hedged) · Global Property
· Small Companies (Listed)
· Regional · Global Property
· Specialist (Hybrid/Direct)
Risk High Medium Medium to High High
Return High Medium Medium to High High
Typical investment 5 to 7 years 5 to 7 years 5 to 7 years 5 to 7 years
A negative annual Once in every 4 years Once in every 6 years Once in every 6 years Once in every 4 years
return is not
Typical investor Investors seeking Investors seeking Investors seeking Investors seeking
long-term mostly income returns inflation hedging and inflation hedging and
investments who are and some growth to diversification of returns diversification of returns
prepared to accept increase the value of in their portfolios. in their portfolios.
short-term fluctuation their investment in the
in returns. long-term.
IOOF Portfolio Service investment strategies 7
Investor Choice (cont.)
➜ Investment categories
Diversified - Diversified Diversified
Alternative Investments Conservative - Balanced - Growth
Investment To provide diversification To provide To provide moderate To provide
objective benefits to clients portfolios consistent returns growth over the moderate to
by exposure to investment over the medium medium to long-term high growth over
strategies that are not to long-term through a balanced the long-term
linked with the returns of through high exposure to growth through high
traditional asset classes over exposure to and defensive assets. exposure to
the medium to long-term. defensive assets. growth assets.
generally aim to provide a
return above the prevailing
Investment Alternative Investments can To invest To invest in a diversified To invest
strategy range from hedge funds, predominantly in portfolio providing a predominantly in
private equity, managed defensive assets such balanced exposure a diversified range
futures and exchange funds as fixed interest and to the major asset of Australian and
to fixed income alternatives cash investments. classes such as cash, international shares
and special co-investment Some capital growth fixed interest securities, and property with
opportunities. is provided through shares and property. a small exposure to
The role of alternative a small exposure to income producing
investments is to provide growth assets such as investments.
returns that are less shares and property.
influenced by fluctuations
in the market and other
traditional asset classes.
Factors Alternative Investments Volatility in interest Returns in the Returns in the
influencing take on a broad range of rates may cause the short-term may be short-term may
investment investment strategies. value of the fixed somewhat volatile be volatile and
returns Hedge funds include interest investments and will be affected will be affected
significant liquidity risk where to fluctuate. by movements in by movements in
there is no secondary market global and local share global and local
for such investments. markets, property share markets,
values as well as property values as
movements in foreign well as movements
currencies. in foreign currencies.
Asset allocation n/a Growth assets: Growth assets: Growth assets:
ranges 0% — 40% 40% — 70% 70% — 100%
Defensive assets: Defensive assets: Defensive assets:
60% — 100% 30% — 60% 0% — 30%
Risk High Low to medium Medium to high High
Return High Low to medium Medium to high High
Typical investment 5 to 7 years 2 to 3 years 5 to 7 years 7 years or more
A negative annual Once in every 4 years Once in every Once in every 7 years Once in every
return is not 10 years 6 years
Typical investor Investors seeking Investors seeking Investors seeking a Investors seeking
diversification to their a conservative balanced exposure to superior long-term
portfolios and returns that portfolio with growth and defensive returns and who are
are not significantly linked to some exposure to assets and who are prepared to tolerate
traditional asset classes in the growth assets. prepared to tolerate short-term volatility.
medium to long-term. short-term volatility. ➜
IOOF Portfolio Service investment strategies 8
Notes on Investor Choice investment options
➜ Any reference to investment returns includes a reference to both income and capital returns. The indicative investment
strategy, objectives and benchmarks may vary across the different managed funds from time to time. This includes
variances in the actual asset allocation for each managed fund as compared to the target strategy benchmarks. To obtain
more information on the investment strategy and benchmarks for each managed fund, please refer to the product
disclosure statement for the particular managed fund.
Direct Share Choice Important information
All fees appearing in IPS fact sheet 2: IOOF Portfolio
Direct Share Choice Service investment options menu are sourced by IOOF
Investment To achieve capital growth and/or from the investment managers or responsible entities.
objective income from dividend distributions IOOF believes these figures to be correct and up to
over the medium to long-term date as at the time of publication, but we accept no
through investing in specific share responsibility if any figures published by IOOF (excluding
investments. the IOOF MultiMix Trusts and the IOOF Multi Series
Balanced Trust) are not the same as those actually
Investment The level of capital growth and/or charged by the investment managers.
strategy income generated is dependant
Before selecting an investment option, you should
on the specific direct share option,
read the current IOOF Portfolio Service PDS and the
the number of shares purchased
relevant fact sheet, including IPS fact sheet 2, and talk to
and the selection/variety of shares
your financial adviser. For each investment option you
included in a member’s portfolio.
select, you should read the relevant product disclosure
The Trustee has made a broad
statement or product guide, provided by your adviser or
range of direct shares available for
available from our web site. These documents include
selection by individual members.
information about performance, asset allocation, costs
Factors Returns from direct shares are and the risks associated with investing in a particular
influencing affected by movements in the investment option.
investment stock market as well as individual Please note, product disclosure statements and
returns company specific factors. product guides are not available for Direct Share Choice
Investment risk can generally be investment options.
reduced by diversifying holdings
across different sectors and within
Risk Very high
Return Very high
Typical investment 7 to 10 years
Typical investor Investors seeking a long-term
investment who are prepared to
accept short-term fluctuations in
IOOF Portfolio Service allows you to select from over 60
different shares selected from the top 150 companies
listed on the ASX based upon market capitalisation.
A minimum of $5,000 must be transacted for each share
parcel. This is assessed at the time of your investment.
This fact sheet has been prepared and issued by IOOF Investment Management Limited (IOOF) (ABN 53 006 695 021) AFS Licence No. 230524. IOOF is a company in the IOOF
Group comprising IOOF Holdings Ltd (ABN 49 100 103 722) and its related bodies corporate.
General advice warning The information contained in this fact sheet:
• does not and is not intended to contain any recommendations, statements of opinion or advice; and
• is of a general nature only and does not take into account your individual objectives, financial situation or needs.
You should consider the appropriateness of this information having regard to your objectives, financial situation and needs and you may
want to seek advice before deciding whether to acquire this product.
Important notice IOOF Portfolio Service Personal Superannuation, IOOF Portfolio Service Allocated Pension and IOOF Portfolio Service Term Allocated Pension
are issued by IOOF as Trustee of the IOOF Portfolio Service Superannuation Fund (ABN 70 815 369 818). Product Disclosure Statements for the
IOOF Portfolio Service range of products are available from our web site (www.ioof.com.au) or by calling us on 1800 062 963. You should
consider the Product Disclosure Statement for the relevant IOOF Portfolio Service product before making an investment decision.