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FirstChoice Wholesale Investments - Changes to UBS Wholesale Australian Share

From 15 May 2017, the investment manager, name and features of the UBS Wholesale Australian Share option will change. The option will now be managed by State Street Global Advisers (State Street) and named the State Street Wholesale Australian Equity option.

 

Why the change?

We undertook an annual review of the FirstChoice investment menu and decided to replace the investment manager for the UBS Wholesale Australian Share investment option. The new investment manager of the option, State Street, will implement a comparable investment objective and strategy for the option.

 

State Street will focus on managing volatility in your option by constructing a portfolio which aims to maximise returns but also minimise total portfolio risk. As a result, the option’s objective will now also aim to deliver returns with lower variability than its benchmark (as measured by standard deviation).

 

With the option’s objective targeting a reduction in volatility, its investment category will change to ‘Lower volatility share’. Generally, the options in this investment category are expected to outperform the benchmark during falling markets and may lag the benchmark in rising markets.

 

Here is a summary of the changes:

Investment option summary

Previous name: UBS Wholesale Australian Share

New name: State Street Wholesale Australian Equity

Previous objective

New objective

To provide investors with a total return (after management costs) in excess of the S&P/ASX 300 Accumulation Index when measured over rolling five-year periods before fees and taxes.

To outperform the S&P/ASX 300 Accumulation Index over rolling five-year periods before fees and taxes but with a lower standard deviation than its benchmark.

Previous strategy

New strategy

The option is an actively managed portfolio of securities listed on the Australian Securities Exchange or those we reasonably expect to list within six months. The option may invest in financial derivatives to gain exposure to the Australian sharemarket or to manage investment risk. Normally, the option will hold between 30 and 60 stocks, with at least 75% of the option invested in stocks that comprise the S&P/ASX 100 Index.

The option is a long only, benchmark unaware active strategy, which invests in listed Australian securities selected primarily from the S&P/ASX 300 Index. The strategy focuses on the manager’s best investment ideas in the universe regardless of benchmark construction, investing in the highest conviction stocks which demonstrate strong returns as assessed by valuation, growth capability, strong cash flows and high sustainable dividends. Equally important is the investment manager’s assessment of risk, giving consideration for stock specific risks, and overall total portfolio risk.

Previous asset allocation

New asset allocation

Assets

Range

Benchmark

Assets

Range

Benchmark

Australian shares

90 ‑ 100%

100%

Australian shares

95 ‑ 100%

100%

Cash

0 ‑ 10%

0%

Cash

0 ‑ 5%

0%

Previous investment category: Australian share

New investment category: Lower volatility share

Previous standard risk measure: 7

New standard risk measure: 6

Previous investment timeframe: At least 7 years

New investment timeframe: At least 7 years

Previous investment benchmark: S&P/ASX 300 Accumulation Index

New investment benchmark: S&P/ASX 300 Accumulation Index

Previous name: Goldman Sachs <Wholesale> Income Plus

If you would like more information about this option, including how to switch from it, please call us on 13 13 36, Monday to Friday, 8am to 7pm Sydney time.

Disclaimer
Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of super, pension and investment products. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. A PDS for Colonial First State’s products are available at colonialfirststate.com.au or by calling us on 13 13 36.