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|Investment option type
||Suits members who want to invest in a specific asset class and are less comfortable with large fluctuations in the value of their investments.
||To achieve the RBA cash rate (after Fund taxes and investment expenses, before deducting account-based fees) over the suggested time frame.
||To invest in a diversified portfolio of cash and money-market securities, including (but not limited to) at-call and term bank deposits, bank bills, negotiable certificates of deposit, notice accounts and other short-term fixed income securities out to a maximum maturity of around one year.
|Suggested investment time frame#
||Minimum of one year
|Expected frequency of negative annual return
||Less than 0.5 years in 20 years.
|Summary risk level
||$2.2 billion (as at 31 January 2020)
|Total fees and costs (%)
* Performance objectives are not promises or predictions of any particular rate of return.
# Depending on circumstances, this investment option may also be suitable for a suggested timeframe of less than one year.
^ Size of both accumulation and pension assets.
Compare our cash rates with retail banks’ cash rates
If you’re invested in our Cash investment option or thinking about investing, you’ll notice our rates are different to those offered by retail banks. Before we compare them, it’s important to understand what differences exist and why.
|UniSuper's cash option rates vs. quoted bank cash rates
|Rates for periods less than 1 year are not annualised
||Rates are annualised
|Rates are after tax
||Rates are before tax
|Rates are based on actual returns earned over the stated period in the past
||Rates are forward looking
Compare our actual crediting rates and quoted bank rates
We don’t annualise our cash rates for periods less than one year. So, to compare our rates with bank rates, we need to annualise our rates first. An approximate method is:
- UniSuper's cash rate for the financial year to date ÷ by the number of months in which the return was earned × 12 months = annualised rate
So, if the quarterly cash return is 1.2%, the comparative approximate annualised return would be:
How you’re taxed
Bank rates are before tax has been deducted. What is earned is consequently taxed at the individual’s marginal tax rate of, say, 30%. This means if you deposit $1000 at a 5% rate with a bank, you’ll be taxed $15 out of the $50 earned over a year.
With our cash rates, on the other hand, we’ve already deducted taxes and fees. This means what you earn is what you get.
We tax investment earnings on our Accumulation Cash option at 15%. However, we don’t tax earnings on our Flexi Pension as they’re tax free.
To fairly compare bank rates and our rates, we have to reapply the 15% tax component from our rates. So, taking our annualised return of 4.8% after tax and dividing it by 0.85 (1-0.15=0.85) produces a comparable before-tax return of:
The difference between prospective and actual earned returns
Our rates reflect what you actually earn in a previous period. Bank rates, in comparison, relate to a period in the future. This means it’s hard to compare the two at any point in time. We can only do this accurately if we do it retrospectively based on our cash rate for a period and looking back at the rate the bank was paying over the same period. However, when interest rates go up, our rates will appear lower because rates were lower in the previous 12 months. Conversely, when rates go down, our rates will appear higher because rates were higher in the previous 12 months.
Option Performance (% p.a.)1
As of 31 Jan 2020
Periods less than a year are not annualised
Option Performance ($)2
Strategic asset allocation (%)3
Last updated on 1 September 2014
By value (descending order) as at 31 January 20205
Commonwealth Bank of Australia - Term Deposits
Commonwealth Bank of Australia - Notice Accounts
National Australia Bank - Term Deposits
Suncorp Metway - Term Deposits
Bendigo Bank - Negotiable Certificates
Bank of Queensland - Negotiable Certificates
Australia & New Zealand Banking Group - Negotiable Certificates
Mizuho Bank Ltd - Negotiable Certificates
1 Past performance is not an indicator of future performance. Option returns are calculated net of investment expenses and Fund taxes but are gross of account-based fees. Due to rounding, excess return may not equate to the difference between option return and median return. The SuperRatings data is based on the SuperRatings survey for the relevant period and does not take into account any subsequent revisions or corrections made by SuperRatings.
2 Past performance is not an indicator of future performance. This graph shows the growth of $10,000 invested in this option over the period illustrated net of investment expenses and fund taxes but gross of account-based fees. No adjustments have been made to reflect the impact of inflation.
Note that the graph uses interim daily crediting rates and does not reflect the final crediting rates which are used to calculate option performance in the table above.
3 The strategic asset allocation may change and may be altered by the trustee from time to time to suit prevailing market circumstances. Actual allocation will deviate from their targets, but are monitored so they are kept within a range approved by the Trustee.
4 These holdings may change from time to time. The above holdings are the outcome of various strategies applied by UniSuper and by a range of investment managers taking into account a variety of considerations, many of which are specific to UniSuper and superannuation funds in general. The above lists are published for informational purposes only and are not a recommendation or endorsement of any of the companies listed, for inclusion in your personal portfolio. Before selecting companies to invest in personally, you should seek professional financial advice that takes into account your personal circumstances and investment objectives. Value includes direct holdings only and does not include exposures from indirect holdings.
5 Value includes direct holdings only and does not include exposures from indirect holdings.
This information is of a general nature only and does not take into account your individual objectives, financial situation or needs. You should read the product disclosure statement and booklets relevant to your membership category, consider the appropriateness of the information having regard to your personal circumstances and consider consulting a licensed financial adviser before making an investment decision based on information contained in this document.