Retirement Lifestyle Sustainer Strategy
Product Profile
The Retirement Lifestyle Sustainer Strategy
(the Strategy) is a diverse investment portfolio,
dynamically allocating to domestic and global
assets based on the prevailing market environment.
The Strategy seeks to achieve a modest growth return
and a consistent level of income within a pre-defined
risk framework.
Strategy Objective
The Strategy’s objective is to deliver absolute returns whilst managing total risk as
assessed by volatility. The Strategy aims to achieve an income return in line with the
RBA Cash Rate and a growth return in line with the Reserve Bank of Australia’s
Consumer Price Inflation (CPI).
Investment Process
Utilising our proprietary Market Regime Indicator (MRI), the Strategy will dynamically
allocate to assets based on the current market environment. This seeks to achieve the
return objective within a defined risk framework, as measured by volatility. Investments
may include Australian and global listed securities; Australian and global fixed income
and cash; and alternative investments such as commodities, infrastructure, property
and managed futures.
The Strategy uses a range of derivatives for currency and risk management.
Why Invest With Us?
Purpose Built for Retirement — The Strategy is part of a series of solutions that
acknowledges investor behaviours and lifestyle aspirations differ through various
stages of retirement and market cycles. The Strategy is purposely designed for
investors who are active in their retirement years.
Investment Process — Our portfolio construction combines a unique and differentiated
blend of quantitative rigor and fundamental perspective to generate a specific outcome
rather than broad exposures to markets.
Global Presence with Local Insights — The Strategy is managed by our ISG team who have
developed and implemented investment solutions for our clients since 1982.
Portfolio Facts
Performance
Objective
• Growth: CPI +
• Income: RBA Cash +
Typical Risk
Profile and
Investment
Horizon
• Medium
• 5–7 years
Typical Investors • Actively enjoying
retirement
• Spending
Investment
Features
• Fit for purpose
investments
• Market regime aware
dynamic asset allocation
• Explicit equity protection
Asset Allocation • Australian Equities = 33%;
(indicative normal min = 4.5%; max = 43%
allocation and
• International Equities =
full range over
17%; min = 0%; max = 25%
market cycle)
• Property/Infrastructure =
10%; min = 0%; max = 17%
• Diversifying Assets = 18%;
min = 6%; max = 28%
• Cash and Fixed Income =
22%; min = 8%; max = 89.5%
Strategy Facts
Performance
Inception
January 2014
Management Fee 0.75% p.a.
Plan for Your Future.
Not a Future.
Retirement Lifestyle Sustainer Strategy
Figure 1: Portfolio Building Blocks
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2
3
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Frequency of Implementation
Contribution to Portfolio
Strategic Asset Allocation (SAA): Fit-for-Purpose Investments
The choice of underlying investments, the SAA, is the primary driver of the Strategy’s
long-term investment performance. Selected investments have characteristics associated
with capital preservation, regular and stable income, inflation offset, capital growth
and/or drawdown mitigation.
Yearly
Long term contributor
to performance
Dynamic Asset Allocation: Right Assets for the Current Environment
Our proprietary macro indicator, the MRI, is designed to identify the level
of risk aversion among investors across global markets. The MRI reading
determines the market’s preference for risky assets and adjusts the portfolio
exposures accordingly.
Weekly
A key risk management
tool to de-risk to defensive
assets in times of stress
Tactical Asset Allocation (TAA)
Our TAA approach is designed to, on a monthly basis, tactically tilt to asset classes that
we identify as being overvalued or undervalued. This is designed to add alpha to the
portfolio by continually assessing the current market environment and positioning the
portfolios to take advantage of these misvaluations.
Monthly
Short term contributor
to relative performance
Daily
Primary risk
mitigation tool
Equity Risk Management
Our Targeted Volatility Trigger (TVT) is a key risk management tool that is designed to
systematically adjust the portfolios’ exposure to equities. In periods of heightened volatility,
TVT will significantly reduce the portfolios equity exposure. Conversely, when volatility
begins to fall, TVT will progressively increase the equity exposure back to normal levels.
Investment Team
SSGA Australia
Dan Farley, CIO, Investment Solutions Group (“ISG”),
leads a team of over 70 dedicated investment professionals
in strategy and research, portfolio management and
fiduciary services. Located in key investment centers in
Boston, Sydney, London, Dublin, Paris, Tokyo and Hong
Kong, the ISG provides perspective on every region, issue
and client type. As at 31 December 2014, the ISG managed
in excess of US$219 billion for our clients. The mission of
our ISG is to engage with our clients, listen carefully and
deliver actionable investment solutions.
State Street Global Advisors, Australia, Limited (“SSGA
Australia”) is the Australian office of SSGA and was established
in 1989. Our local office in Sydney provides a broad range of
investment strategies to Australian, New Zealand and Asia
Pacific based clients. We are one of Australia’s largest asset
managers and are part of SSGA’s network of global investment
centres. SSGA Australia is staffed with portfolio management,
business development, risk and operational professionals who
are committed to unwavering client service through an
investment culture built on experience and skill.
Mark Wills, Head of ISG, Asia Pacific is based in Sydney and is
supported by a dedicated team across the region. The local ISG
team are able to tap into more than 400 global investment
professionals, risk, regulatory and compliance specialists
within SSGA.
SSGA: Invest With A Global Leader
For nearly four decades, SSGA has been committed to helping
our clients, and those who rely on them, achieve financial
security. We partner with many of the world's largest, most
sophisticated investors and financial intermediaries to help
them reach their goals through a rigorous, research-driven
investment process spanning both indexing and active
disciplines. With trillions1 in assets, our scale and global reach
offer clients unrivaled access to markets, geographies and asset
classes, and allow us to deliver thoughtful insights and
innovative solutions.
SSGA is the investment management arm of
State Street Corporation.
State Street Global Advisors
How to Invest
Managed Investment Schemes
The strategy is available via the SSgA Retirement Lifestyle
Sustainer Fund (the Fund). Interest in the Fund is generally
only available to residents of Australia. Eligible investors
should read the Product Disclosure Statement and Information
Booklet and can apply by completing the application form
available on ssga.com. Additional Know-Your-Client
information may also be required.
For any questions in relation to initial applications
please contact us on +612 9240-7600.
Separately Managed Accounts
For more information please contact your local SSGA
sales representative.
1
Assets under management were US$2.4 trillion as of 31 March 2015.
2
Retirement Lifestyle Sustainer Strategy
Meet the Key Team Members
Dan Farley, CIO
Investment Solutions Group
Dan is the Chief Investment Officer for SSGA’s ISG and is
responsible for the management and development of asset
allocation strategies for institutional clients worldwide.
His responsibilities include the design and management of
Liability Driven Investments, tactical asset allocation and
overlay strategies.
Dan holds a BSBA from Stonehill College and an MBA from
Bentley College, and has earned the Chartered Financial
Analyst designation. He is a member of CFA Institute and the
Boston Securities Analyst Society.
Rafiq Choudhury
Senior Portfolio Manager
Raf is a Senior Portfolio Manager in the ISG and is responsible for
managing a range of strategies from Strategic AssetAllocation to
Absolute Return and equity risk reduction strategies.
Prior to joining SSGA, Raf worked at both ABN Amro and JP
Morgan Chase. Raf graduated from Durham University with a
BSc (Hons) in Business and Finance and obtained a Masters in
Investment Management from Cass Business School London.
Mark Wills
Head of Investment Solutions Group, Asia Pacific ex-Japan
Mark is Head of the ISG in Asia Pacific and is responsible for
developing and implementing tactical and strategic multi asset
class solutions for institutional clients in the region.
Previously Mark worked at Goldman Sachs JBWere in
Australia, where he held a number of roles, most recently
as an Executive Director in Transition Management.
Mark has earned a Bachelor of Economics from Macquarie
University and a Masters of Business in Applied Finance from
the University of Technology.
Edwin Kwok, CFA
Intermediate Portfolio Manager
Edwin is an Intermediate Portfolio Manager in the ISG and
his responsibilities include portfolio management, tactical
views and implementation.
Prior to joining SSGA, Edwin worked at First State Investments
in Singapore and Colonial First State Global Asset Management
in Sydney. Edwin has been awarded the Chartered Financial
Analyst (CFA) designation. He also holds a Bachelor of Law and
a Bachelor of Science (Physics) from The University of New
South Wales.
VT Alaganar, CFA, Ph.D.
Investment Strategist
VT is an Investment Strategist in the ISG based in Sydney. He
obtained his MBA from the University of Wisconsin-Milwaukee
under a Fulbright Fellowship from Sri Lanka. After earning a
PhD in Finance from this university in 1990, VT worked as an
Assistant Professor in Finance at Hofstra University in Long
Island, New York, and the School of Finance and Economics at
the University of Technology, Sydney. He earned his Chartered
Financial Analyst designation in 1997.
State Street Global Advisors
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Retirement Lifestyle Sustainer Strategy
ssga.com
For institutional use only. Not for use with the public.
Issued by State Street Global Advisors, Australia, Limited (ABN 42 003 914
225) (“SSGA Australia”) the holder of an Australian Financial Services Licence (AFSL
Number 238276). SSGA Australia’s Responsible Entity, State Street Global Advisors,
Australia Services Limited (ABN 16 108 671 441) (“SSGA, ASL”) holds an Australian
Financial Services Licence (AFSL Number 274900) pursuant to Section 913B of the
Corporations Act 2001. Registered office: Level 17, 420 George Street, Sydney, NSW
2000, Australia. Telephone: +612 9240-7600. Facsimile: +612 9240-7611.
References to the SSgA Retirement Lifestyle Sustainer Fund ("the Fund") in this
document are references to the managed investment scheme domiciled in Australia,
promoted by SSGA Australia, in respect of which SSGA, ASL is the Responsible
Entity. Investing involves risk including the risk of loss of principal. Risk associated
with equity investing include stock values which may fluctuate in response to the
activities of individual companies and general market and economic conditions.
Investing in foreign domiciled securities may involve risk of capital loss from
unfavorable fluctuation in currency values, withholding taxes, from differences in
generally accepted accounting principles or from economic or political instability in
other nations. Investments in emerging or developing markets may be more volatile
and less liquid than investing in developed markets and may involve exposure to
economic structures that are generally less diverse and mature and to political
systems which have less stability than those of more developed countries. Investing
in REITs involves certain distinct risks in addition to those risks associated with
investing in the real estate industry in general. Equity REITs may be affected by
changes in the value of the underlying property owned by the REITs, while mortgage
REITs may be affected by the quality of credit extended. REITs are subject to heavy
cash flow dependency, default by borrowers and self-liquidation. REITs, especially
mortgage REITs, are also subject to interest rate risk (i.e., as interest rates rise,
the value of the REIT may decline). Although bonds generally present less shortterm risk and volatility risk than stocks, bonds contain interest rate risks; the risk
of issuer default; issuer credit risk; liquidity risk; and inflation risk. This effect is
usually pronounced for longer-term securities. Any fixed income security sold or
redeemed prior to maturity may be subject to a substantial gain or loss.
State Street Global Advisors
Asset Allocation is a method of diversification which positions assets among major
investment categories. Asset Allocation may be used in an effort to manage risk
and enhance returns. It does not, however, guarantee a profit or protect against
loss. Investments in issuers in different countries are often denominated in
different currencies. Changes in the values of those currencies relative to the
Strategy’s base currency may have a positive or negative effect on the values of
the Portfolio’s investments denominated in those currencies. The Strategy may,
but will not necessarily, invest in currency exchange contracts or other currencyrelated transactions (including derivatives transactions) to reduce exposure to
different currencies. These contracts may reduce, take or eliminate some or all of
the benefit that the Strategy may experience from favorable currency fluctuations.
Investing in commodities entail significant risk and is not appropriate for all investors.
Commodities investing entail significant risk as commodity prices can be extremely
volatile due to wide range of factors. A few such factors include overall market
movements, real or perceived inflationary trends, commodity index volatility,
international, economic and political changes, change in interest and currency
exchange rates.
Derivative investments may involve risks such as potential illiquidity of the markets
and additional risk of loss of principal.
This material is of a general nature only and does not constitute personal advice. It
does not constitute investment advice and it should not be relied on as such. It does
not take into account any investor’s particular investment objectives, strategies,
tax status or investment horizon. We encourage you to consult your tax or financial
advisor. There is no representation or warranty as to the current accuracy of, nor
liability for, decisions based on such information. Past performance is not a reliable
indicator of future performance.
This communication is directed at institutional and wholesale clients only. The
products and services to which this communication relates are only available to such
persons and persons of any other description (including retail clients) are not entitled
to rely on this communication.
The whole or any part of this work may not be reproduced, copied or transmitted
or any of its contents disclosed to third parties without SSGA Australia’s express
written consent.
© 2015 State Street Corporation. All Rights Reserved.
ID4530-AUSMKT-1923 0715 Exp. Date: 31/07/2016