Risks of super
Employer-sponsored and personal superannuation members.
This document was prepared on 1 March 2017. The information in this document forms
part of the Statewide Super product disclosure statement (PDS) prepared on 1 March 2017.
www.statewide.com.au/join
Contents
Risk and return2
Significant risks of super
3
Important information
The information in this booklet forms part of the Statewide Super
product disclosure statement (PDS) prepared on 1 March 2017 for
employer-sponsored and personal superannuation members which
offers an interest in Statewide Super, divisions 1 and 2 respectively
within the Statewide Superannuation Trust (the fund). The fund is a
regulated and complying superannuation fund.
Statewide Superannuation Pty Ltd ABN 62 008 099 223 Australian
Financial Services Licence (AFSL) Number 243171, is the issuer and
Registrable Superannuation Entity (RSE) licensee and trustee of the
fund and is authorised to offer a MySuper product (unique
identifier 54 145 196 298 820).
The information in this booklet is not personal advice. In providing
this information to you we have not taken into account your
objectives, financial situation or needs. We recommend that you
seek professional financial advice from a licensed adviser.
This booklet may be updated or replaced at any time. Changes that
are not materially adverse will be updated and made available on
our website at www.statewide.com.au.
Page 2 | Risks of super
Risk and return
It’s important to understand that there is an element of risk in
investing and that superannuation and taxation laws do change.
Generally, investment risk is the chance that your investment will be
different to what you expect. Your investment in Statewide Super
could rise or fall in value, or produce a return that is less than you
anticipate. Rises and falls in value occur for a variety of reasons and
sometimes quickly.
As our investment options are invested across different asset
classes, they all carry different levels of risk and produce different
levels of return over time. To ensure you choose the investment
strategy that’s right for you, you’ll need to consider:
• what level of return you want to achieve
• what level of risk you’re comfortable with.
An option’s level of risk depends on the nature of its underlying
investments and how it’s structured to achieve its objective. In
general, the greater the expected returns, the greater the level of
risk, and the greater the likelihood that returns will fluctuate from
year to year – they may go up or they may go down – they may even
be negative.
Significant risks of super
Some significant risks are listed below.
Type of risk
Explanation
Inflation
The risk that inflation may exceed the return on an investment.
Interest rates
This risk relates to the impact that changes in interest rates may have on your investments.
Exchange rates
This risk relates to changes (i.e. increases and decreases) in the currency of countries in which we invest and the
impact of those changes on your investment.
Liquidity
The risk that an investment may not be able to be converted into cash easily and quickly with no, or little, loss of
capital.
Diversification
The risk that an investment may be exposed to an increased risk of loss by not being spread across a range of asset
classes.
Market
This risk relates to changes in the market as a whole due to economic or political factors, possibly triggering a
change in the value of your investment. A market failure or significant financial collapse can affect investments
broadly.
Specific
(or individual
investment)
The risk that a particular asset in which the fund invests may fall in value due to factors specific to the asset, such
as changes to the internal operations of a company. Specific risk is managed by holding a diversified portfolio of
assets across asset classes.
Operational
risks
This risk includes:
• superannuation and taxation law risk – the risk that the changes in laws or regulations may impact the value of
your investments.
• fund risk – the risks associated with the management of the fund (e.g. the fund could close or Statewide
Superannuation Pty Ltd could be replaced as the trustee) and the impact these actions may have on your
investments.
• compliance risk – the risk that the fund will lose its complying status and therefore lose its associated tax
concessions. Statewide Super manages this risk by ensuring that the fund is administered professionally and that
it operates in accordance with the requirements of the fund’s Trust Deed and superannuation law.
• fraud risk – the risk that fraudulent activities may impact on, or reduce, your benefits in the fund; Statewide
Super manages this risk by ensuring that the fund is insured, and by putting operational controls and safeguards
in place.
Derivatives
The risks related to the use of derivatives in the investment portfolio. Financial derivatives are instruments that
can be used to manage the risk and volatility of an investment portfolio or to ensure the efficient implementation
of portfolio strategies. Statewide Super’s appointed investment managers may use financial derivatives in a
manner that is consistent with their own internal policies and that of the fund’s trustee.
Statewide Super’s trustee expects that financial derivatives will be used to enhance the returns of the portfolio
and to ensure efficiency in portfolio transactions. Financial derivatives may only be used in a conservative manner
and cannot be used for speculation or for gearing.
If having the higher level of risk associated with seeking greater longterm returns is giving you sleepless nights, you’re able to lower your
investment risk by spreading your investments across different asset
classes. This strategy is known as ‘diversification’. Some of Statewide
Super’s investment options are diversified investments. See
the ‘How we invest your money’ booklet, available from
www.statewide.com.au or by calling us on 1300 65 18 65, to
find out more about asset classes and diversified options.
Reserving policy
Statewide Super maintains an operational risk reserve and is
operated inaccordance with our ‘Operational risk reserve policy’.
The purpose of the reserve is to meet the costs of incidents where
material losses may arise from operational risks and any unforeseen
costs of the fund. The level of reserve is determined by the Board,
based on an assessment of the risks faced by the fund.
Risks of super | Page 3
Significant benefits and risks
Statewide Super assists you to save for your retirement in a tax-effective environment. It enables you to tailor your investment strategies to your own
needs and attitude to risk, as well as offering you a choice of insurance cover for life, total and permanent disablement and income protection.
You should be aware that if you leave the fund within a few years of joining, you may get back less than the amount of contributions paid in because of
the level of investment returns earned by the fund, the fund’s charges and the impact of tax. This booklet is based on current laws and laws affecting
superannuation may change at any time.
The trustee is committed to ensuring that the fund is prudently managed. This commitment is evident via a number of measures such as corporate
governance policies and codes of conduct. Information on these can be found on our website.
The trustee wants to make the following information clear to you:
Neither the performance of the fund, the repayment of capital nor any particular rate of return is guaranteed by the trustee, the investment managers,
service providers or associated companies of the parties mentioned in the booklet. Investment markets do fluctuate. If the investment options you
choose are not right for you, you may not achieve the goals you set.
Member Services: 1300 65 18 65
Address: 211 Victoria Square, Adelaide, SA 5000 Email: [email protected]
Postal address: GPO Box 1749, Adelaide SA 5001
Statewide Superannuation Pty Ltd ABN 62 008 099 223 (AFSL 243171) trustee and RSE licensee of Statewide Superannuation Trust ABN 54 145 196 298.
The information provided is of a general nature. It does not consider your specific needs nor is it intended to be financial product advice. You should obtain independent
financial advice and consider the applicable product disclosure statement before making an investment decision. Financial information and general advice may be provided by
representatives of Statewide Superannuation Pty Ltd ABN 62 008 099 223 Australian Financial Services Licence No. 243171. Any personal advice may be provided by an authorised
representative of Industry Fund Services Limited (IFS) ABN 54 007 016 195 AFSL No 232514. Fees may apply for financial planning advice. IFS is responsible for the advice given to you
by its authorised representatives.
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