Balanced
| Asset Class | Strategic Asset Allocation as at 1 November 2011 | Range | Actual Asset Allocations as at 8 May 2012* |
| Target Return Portfolio | 40.0% | 30-60% | 45.06% |
| Cash | 6.5% | 0.5-15% | 6.86% |
| Australian Fixed Interest | 7.5% | 0-15% | 7.64% |
| International Fixed Interest | 1.5% | 0-15% | 1.37% |
| Australian Shares | 24.5% | 5-35% | 21.75% |
| International Shares (developed overseas shares and emerging market shares) | 20.0% | 5-35% | 17.31% |
*Figures may not total 100% due to rounding
Objective: The Balanced Option seeks high long-term returns through a balanced exposure to risk. The objective is to out-perform (after fees and tax) the Consumer Price Index increase by 4 per cent a year over rolling five-year periods.
Strategy: This option seeks high returns and return stability over the medium to longer term. The strategy is to maintain and manage a well-diversified, risk-controlled exposure to market and specific risk. This option invests mainly in listed equities and the Target Return Portfolio. In each asset class there is a high level of risk exposure. Stability of returns is sought through diversification at the asset class level.
Level of risk: Medium-high. This option is likely to exhibit return volatility in the short term and has an estimated probability of a negative return in four years out of every 20 years. It has exposure to specific risk, market risk, currency risk, liquidity risk, derivative risk and inflation risk to various levels.
Typical investor: Members who are able to take on above-average risk.
It is important to note that the actual asset allocation for the Balanced Option may differ from its strategic asset allocation because of market fluctuations from time to time, new investment opportunities and irregular levels of cash flow. For example, when the share market falls, the proportion of the asset allocation in the Balanced Option to equities will decrease and the allocation to other asset classes in the option will correspondingly increase.
While the Trustee seeks to ensure that variations between the actual and strategic asset allocations of the Balanced Option are managed within the specified ranges, in times of extreme market volatility the divergence between the actual and strategic asset allocations can be quite significant.