Asset allocation changes


Moving to a Strategic Asset Allocation (SAA)

From 1 October 2018, Cbus is introducing a Strategic Asset Allocation (SAA) for each option that replaces the Long Term Strategic Asset Allocation (LTSAA). The LTSAA was based on a 20 year investment horizon. In contrast, the SAA is based on a 10-plus year investment horizon that includes medium and longer-term risks and opportunities, such as stronger growth from emerging market economies. The SAA will be reviewed annually or more frequently should that be required.


What happens to the Target Portfolio?

The Target Portfolio, which differs from the SAA by taking a shorter term view of the investment environment, will continue to be used by the Cbus investment team internally.


What else is changing?

There are also changes to asset classes that are effective from 1 October 2018:

Absolute Return

The Opportunistic Growth sector will be renamed Absolute Return to better reflect the nature of the asset class. This asset class will include investments that provide returns broadly in line with equities, with a low sensitivity to equity market and interest rate risk.

Emerging Markets and Global Markets

The International shares portfolio will be split into Emerging Market Equities and Global Equities, providing our members with an understanding of the exposure we have to emerging markets.