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Balanced socially responsible

The Balanced socially responsible option in detail - for pension members

Return objective

  • To maximise long-term investment returns.
  • To outperform an average annual return of CPI plus 3.5% p.a. net of tax, investment and administration fees over rolling 10-year periods

Risk profile

Offers greater emphasis on shares and property to achieve higher returns, but includes some lower-risk assets to moderate short-term risks. Investments are made with a focus on managing sustainability and environmental, social, and governance (ESG) risks. This option is likely to produce a negative return in 4 to 6 years in every 20 years.

Risk level: 

High

Investor profile

Will suit investors looking for moderate to high returns over the medium to long-term, but who are prepared to accept fluctuations in investment performance over shorter periods. 

Minimum suggested time frame for holding the investment is 5 years

Asset allocation 

Asset mix Benchmark % Permitted range %
Australian shares 29.1 10 – 40
International shares 29.1 10 – 40
Alternative assets 14.5 0 – 20
Property3.9  0 – 20
Fixed interest 12.6 0 – 50
Cash10.8 0 – 20

Investment strategy

The Balanced Socially responsible option currently invests in the Pendal Sustainable Balanced Fund (SB Fund). This is a multi-manager fund operated by Pendal Group that considers environmental, social and governance (ESG) factors when making investment decisions. 

The SB Fund is an actively managed diversified portfolio that invests in Australian and International shares, Australian and International property securities, Australian and International fixed interest, cash and alternatives. 

Pendal Group selects the managers of the SB Fund based on a range of sustainable, ethical, and financial criteria that address both investment considerations and responsible investing parameters. 

Pendal Group also has a dedicated ESG research team, Regnan, which supports and informs investment decisions through its in-house research, engagement and advisory functions. Investments are selected based on a range of sustainable, ethical and financial criteria.

The SB Fund actively seeks an exposure to securities and industries that demonstrate leading ESG and ethical practices while avoiding exposure to companies with activities or behaviour considered to negatively impact the environment or society. This means that the SB Fund will avoid exposure (either directly or indirectly through underlying managers and funds) to companies with a material exposure to the production or manufacture of: 

  •  tobacco; 
  • fossil fuels; 
  • weapons (zero % threshold);  
  • uranium (for the purpose of weapons manufacturing); 
  • alcohol; 
  • gaming; and 
  • pornography.

A company deriving more than 10% of its total revenue from these industries constitutes material exposure. In addition, with the combustion of fossil-fuels being the main source of global greenhouse gas emissions, the SB Fund's range seeks to limit exposure to companies which have a material exposure to the most carbon intensive fossil fuels by excluding any company that has more than a 10% exposure (as measured by percentage of market capitalisation, or other appropriate financial metric) to one, or a combination of, the following: 

  • mining thermal coal 
  • exploration and development of oil sands. 

Exclusions may be updated, from time to time, following review and approval by Pendal Group. Investors will be notified of any changes to the exclusions.

Performance