The option primarily invests in Australian and global listed securities.

To deliver an investment return of 5% pa before fees and taxes above inflation over rolling three-year periods. Inflation is defined as the Benchmark.

– Flexible investment universe: By investing across a broad range of asset classes the Fund can take advantage of opportunities wherever they arise.
– Active asset allocation: The Fund’s asset allocation approach is active and relatively unconstrained – this means it has sufficient flexibility to adapt to changing markets.
– Protection from the market: Our approach is aimed at protecting investors from bearing the full brunt of falls in markets.
– Focus on real returns: Developed in Australia for Australian clients, the Fund aims to deliver a 4% to 5% return above Australian inflation (before fees), over rolling 3 year periods, without taking undue risk, so that the journey to achieving this objective 
is a relatively stable one.¹
– Expertise: Investors will benefit from the experience and expertise of Schroders’ dedicated multi-asset investment team. We manage the Fund locally, drawing on the insights and experience of our dedicated local and global teams

This product is likely to be appropriate for a consumer seeking capital growth, capital preservation and income for all or some components of their portfolio, with a medium to high risk and return profile.

Schroders has helped Australian investors achieve their objectives since 1964 through our diversified suite of actively managed investment products, which now spans both public and private markets. Our local expertise in equities, fixed income, multi-asset and alternatives, combined with our global resources facilitates a diversity of thought to assess each situation from every angle and consider the long-term impact on
returns and the earth. 

Schroders is part of the Schroders Group, an investment manager with over 200 years’ experience which is headquartered in London and has a presence in 37 locations around the world. Schroders offers Australian investors the strength and stability of a global firm coupled with the long-term perspectives and independent thinking of a local manager.

Why Schroders?
– Stability of a global firm with strong heritage
– Dedicated to building a sustainable future, with sustainability integrated into our investment processes
– A diverse and experienced investment team with an independent view
– Active in every aspect of our business
– Investors are at the heart of everything we do 

How The Fund is Managed

The Fund employs an objective based asset allocation framework in which both asset class returns and the asset allocation of each portfolio are constantly reviewed. As risk premia (and thereby expected returns) change, so too will the asset allocation of the Fund (and sometimes significantly).
The investment process has four key interlinked steps.

1. Inputs
2. Objective optimisation
3. Strategy refinement
4. Portfolio construction

Governance and risk management forms a constant throughout all parts of the investment process.
A summary of the major components of the process are outlined below.

Inputs

Identifying the right assets to own and when to own them is the most important step in the investment process as it will have the greatest impact on the overall return and risk characteristics of the Fund. Within this step of the process we firstly look to develop the assumptions that underpin the portfolio construction process. This is done by formulating long run expectations for key asset classes and adjusting these to incorporate shorter term mean considerations of value to generate return forecasts that match our investment horizon. Assumptions about risk and correlation are also developed.

Objective optimisation

In this stage, we utilise our proprietary optimisation model to begin to convert our assumptions into a series of portfolios that account for the covariance between these assets.

Strategy refinement

While valuation issues/concerns have been addressed during the first stages, we need to then review and incorporate other factors into the process. Other key factors that are important when building objective based portfolios include: understanding the economic cycle, assessing market distortions, and understanding market liquidity. This leads to an indicative portfolio and allows us to identify and incorporate return seeking and risk mitigating strategies.

Portfolio Construction

Using the outcomes of our strategy refinement at the end of this process, we need to identify the portfolio that will help meet our objective. The portfolio is then subject to a broad series of tests, mainly utilising our proprietary systems. These include measurement of statistical risk, factor risk, scenario testing and common sense. These risks are managed via the purchase of insurance, utilising instruments such as options; and ensuring the Fund is sufficiently diversified to cope under periods of market stress.