Investment Structure 30 June 2018 High-level structure apss ASSETS MEMBER SAVINGS $3.6 Money invested voluntarily by members into the four APSS investment options: 47% $7.8 30 June 2018 53% DEFINED BENEFIT ASSETS $4.2 Money invested to provide for members APSS Defined Benefits. LEARN MORE > LEARN MORE > Around $20 million is held as an Operational Risk Reserve (ORR). See page 10 of the last APSS Annual Report for details. Note: All values are expressed in Australian dollars (AUD) and are shown as at 30 June 2018. Read the full disclaimer on the last page of this document. apss.com.au APSS INVESTMENTS
Investment Portfolios MEMBER SAVINGS Conservative Cash Balanced (MySuper) High Growth DEFINED BENEFIT ASSETS $1.0 $0.1 $2.3 $0.2 $4.2 % Public market shares 0.0 % Public market shares 19.8 % Public market shares 42.8 % Public market shares 62.9 % Total $ s Public market shares 42.8 $2.8 Private market assets 0.0 Private market assets 11.7 Private market assets 23.2 Private market assets 23.3 Private market assets 23.2 $1.6 Alternative credit 0.0 Alternative credit 1.7 Alternative credit 3.3 Alternative credit 3.3 Alternative credit 3.3 $0.2 Bonds 0.0 Bonds 40.1 Bonds 20.1 Bonds 0.0 Bonds 20.1 $1.4 Cash 100.0 Total 100.0 Cash 26.7 Total 100.0 Cash 10.6 Total 100.0 Cash 10.5 Total 100.0 Cash 10.6 $1.8 Total 100.0 $7.8 Growth/Defensive assets Growth Defensive 100% 33% 67% 69% 31% 90% 10% 69% 31% 2
Public market shares 'Public market' refers to financial markets where investments are traded on public exchanges like the Australian Securities Exchange. Because such investments can be bought and sold readily, they are referred to as liquid. Their very liquidity means that their value can change very quickly if investor demand rises or falls. This is a characteristic referred to as volatility. So Public market shares are simply shares traded on public exchanges. The APSS Trustee has appointed the managers detailed in the table at right, on the recommendations of its Investment Committee and a range of investment advisers. All managers appointed by the Trustee must operate according to the Trustee s strict investment mandates, which govern how they may operate and trade Public market shares on behalf of the APSS. Australian shares 20.0% Vanguard Australian Shares 12.4% Northcape Capital 7.6% International shares 61.4% Veritas Asset Management 12.6% Sustainable Growth Advisors LP 11.1% State Street Global Advisors 10.1% AQR Capital Management 10.0% Vanguard International Shares 9.9% Paradice Investment Management 7.8% Emerging markets shares 19.4% Vanguard Emerging Market 7.4% AQR Capital Management 7.2% Morgan Stanley Investment Management (Australia) 4.8% Currency overlays (0.9%) Macquarie Investment Management Global (0.9%) To learn more about the individual companies we have share investments in, as well as how our appointed managers voted on our behalf on each company s resolutions, go to find the latest available Proxy Voting Report at apss.com.au under the About tab by clicking on Policies, reports and rules then Proxy Voting Policy. 3
Private market assets 'Private market' refers to financial markets where investments are traded privately. These privately-traded investments could be in unlisted companies (or private equity), infrastructure, property and commercial loans. Such investments are usually locked in by long-term contracts which mean that they cannot readily be bought or sold. Because their value is not set by trading on public markets, private market investments don't generally display much volatility over short periods. The APSS invests directly into a wide range of funds that provide private markets exposure, as listed in the table at right. Private equity 74.7% Pantheon International PLC - LOAN NOTE 14.8% HIPEP VI Partnership Fund, LP 6.0% HarbourVest Partners VIII - Venture Fund, LP 5.2% Pantheon International PLC - ORDINARY SHARES 5.0% HarbourVest Partners VIII - Buyout Fund, LP 4.2% Others 39.6% Private property 12.8% Stafford International Timberland V Fund 1.7% Alinda Infrastructure Fund II, LP 1.6% RECP Fund III, LP 1.4% Stafford International Timberland IV, LP 1.4% Sustainable Woodlands Fund LP 0.9% Others 5.8% Private market opportunities 15.3% Special Situation Partners II 3.0% Quantum Energy Partners V 2.6% Industry Ventures Fund V 1.7% Lexington Capital Partners VI-A 1.2% Montauk TriGuard Fund IV 1.0% Others 5.7% Currency overlays (2.9 %) Macquarie Investment Management Global (2.9 %) 4
Alternative credit Alternative credit is a broad asset class that includes a range of incomegenerating debt investments that fall outside of traditional bonds and cash. Alternative credit investments can include high-yield bonds, bank loans, structured credit bonds, emerging market debt, direct lending and specialty financing. Alternative credit 100% Towers Watson Alternative Credit Fund 96.9% Stafford Credit Opportunities Fund 3.3% Currency overlay (0.2%) Macquarie Investment Management Global (0.2%) Unlike bonds, alternative credit is considered a growth investment rather than an income asset. Returns are therefore potentially higher than for bonds, but there is also more risk in the short term. 5
Bonds Bonds (also known as debt securities) are a type of financial asset that is essentially an 'I owe you' issued to investors from governments, corporations and other large institutions seeking to raise money. Investing in bonds basically involves acquiring the right to receive interest and a repayment of the original amount of the money raised by the borrower. Australian fixed interest 60.0% Vanguard Australia Fixed Interest Fund 33.3% Vanguard Cash Plus Fund 26.7% Australian inflation linked 20.1% Vanguard Australian Inflation Linked Fund 20.1% International fixed interest 19.9% Colchester Global Investors (Singapore) Pte. Ltd 19.9% The APSS invests directly into both Australian and international bond markets, as set out in the table at right. 6
Cash Cash in the APSS portfolio can include bank deposits, bills or securities with very high credit quality, held either directly or via a managed investment trust. Cash 100.0% Vanguard Cash Reserve Fund 68.0% Vanguard Cash Plus 32.0% Allocations to Cash Reserve or Cash Plus vary depending on investment choice. Cash allocations as at 30 June 2018 are shown at right. 7
DISCLAIMER: All values are expressed in Australian dollars (AUD) and are shown as at 30 June 2018. Australia Post Superannuation Scheme (ABN 42 045 077 895) Issuer: PostSuper Pty Ltd (ABN 85 064 225 841) RSE Licence Number L0002714 APSS Registration Number R1056549. Important Note: All investments carry risk and may rise and fall. International investing involves additional risks, including the risk of currency fluctuations. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is not a guarantee of future returns or crediting rates. APSS s crediting rates are calculated fortnightly and are published on apss.com.au under the Investments tab. The information contained in this publication is of a general nature, is not intended to be financial product advice and does not take your personal financial circumstances into account. Before acting on any information contained in this document you should first consider its appropriateness to your financial circumstances. If you have any doubts or require further assistance you may wish to seek the advice of a professional financial adviser. The APSS Trustee does not hold an Australian Financial Services Licence and therefore is not licensed to provide you with financial product advice. The APSS Trustee has a relationship with State Super Financial Services Australia Limited, trading as StatePlus, a licensed provider of financial planning services (ABN 86 003 742 756, AFS Licence No. 238430). StatePlus is responsible for the advice given to APSS members under this arrangement. Issued: 27 July 2018. 8