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Vision Super

PRI reporting framework 2019

You are in Organisational Overview » Basic information

Basic information

OO 01. Signatory category and services

01.1. Select the type that best describes your organisation or the services you provide.

01.3. Additional information. [Optional]

Vision Super is a Public Offer Industry Super Fund focussed on Local Government.

The Fund has been in existence since 1947 and run only to benefit our members (approximately 100,370) not to make profit for shareholders.

Breakdown of Membership Numbers as follows:

Accumulation members: 86,745

  1. Personal: 7,365
  2. Super Saver: 79,380

Defined Benefit: 8,619

Retirement: 5,006

 


OO 02. Headquarters and operational countries

02.1. Select the location of your organisation’s headquarters.

Australia

02.2. Indicate the number of countries in which you have offices (including your headquarters).

02.3. Indicate the approximate number of staff in your organisation in full-time equivalents (FTE).

96.61 FTE

02.4. Additional information. [Optional]

Note for Item OO 02.3: As at the end of Dec 2018, FTE was 96.61 (headcount was 101). Please note this includes employees who were on maternity leave but still employed by Vision Super. It is 95.21 FTE without the maternity leave employees.

Growth for the Fund over the last twelve months has been positive. The Board has put in place strategies to grow the Fund. These have started to pay-off with positive membership growth over the 2016-17 financial period.

Furthermore, the Fund has maintained a positive membership growth along with positive net contributions over the last finanical period. 


OO 03. Subsidiaries that are separate PRI signatories

03.1. Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right.

03.3. Additional information. [Optional]

Further to Item OO 03.1

The Trustee decided to wind-up its Pooled Superannuation Trust (PST) where all the investment porrtfolios were housed, effective 28 February 2019

Ownership Structure effective 1 March 2019 as follows:

  • Vision Super Pty Ltd (VSPL) is 100% owned by Local Authorities Superannuation Fund (LASF)
  • VSPL is the Trustee of LASF
  • Ownership of shares for Directors are beneficailly held for LASF
  • There are no controllers who directly or indirectly exercise control through the capacity to determine decisions about financial and operating policies.

  • The ultimate owners of LASF are the members of LASF.  LASF is a superannuation fund (otherwise known as a pension fund overseas) and has approximately 100+k members.

  • LASF’s LEI is 549300SG8QC5PIMI9R33, and
  • VSPL’s LEI is 549300RXFKKBJRT6DV66.

 


OO 04. Reporting year and AUM

04.1. Indicate the year end date for your reporting year.

30/06/2018

04.2. Indicate your total AUM at the end of your reporting year.

Include the AUM of subsidiaries, but exclude advisory/execution only assets, and exclude the assets of your PRI signatory subsidiaries that you have chosen not to report on in OO 03.2
Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

04.5. Additional information. [Optional]

The total AUM outlined in OO 04.2 is the total investment assets in the Vision Super Pooled Superannuation Trust.


OO 06. How would you like to disclose your asset class mix

06.1. Select how you would like to disclose your asset class mix.

Internally managed (%)
Externally managed (%)

 

Listed equity 0 0 10-50% 46.5
Fixed income 0 0 10-50% 12.7
Private equity 0 0 <10% 3.4
Property 0 0 <10% 8.7
Infrastructure 0 0 <10% 8.6
Commodities 0 0 0 0
Hedge funds 0 0 <10% 0.73
Fund of hedge funds 0 0 0 0
Forestry 0 0 0 0
Farmland 0 0 0 0
Inclusive finance 0 0 0 0
Cash 10-50% 12.9 0 0
Money market instruments 0 0 0 0
Other (1), specify 0 0 <10% 0.05
Other (2), specify 0 0 <10% 6.4

'Other (1)' specified

          This relates to the Tail Risk Protection/Hedging Strategy for the Defined Benefit Plan (LASF) managed by PIMCO.
        

'Other (2)' specified

          This relates to our Absolute Returns Multi Asset Strategy which is comprised of managers Southpeak (Real Diversification Fund) and Invesco (Wholesale Global Targeted Returns Fund)
        

06.2. Publish asset class mix as per attached image [Optional].

06.3. Indicate whether your organisation has any off-balance sheet assets [Optional].

06.5. Indicate whether your organisation uses fiduciary managers.

06.6. Provide contextual information on your AUM asset class split. [Optional]

Vision Super Asset class strategies (Last updated: 2 August 2018)

Australian equities

Outperform the S&P/ASX 300 Accumulation Index by 1% p.a., after fees, over five years or more;
Keep the overall MER within Australian equities below 0.35% p.a.;
Outperform the market in down markets (average outperformance in months where the ASX 300 produces a negative return);
Minimise the number of managers to five or less unless there is a compelling return and/or risk proposition; and
Manage efficiently for after tax outcomes.

Performance benchmark: S&P/ASX 300 Accumulation Index

Configuration

IFM Low Carbon Emission Mandate 53.0%

Perpetual Small Cap 7.5%

Kinetic Investment Partners Ltd - Small Cap 7.5%

Airlie Industrial Shares 17.0%

Wavestone Australian Equities 15.0%

Total 100%

 

International equities

Outperform the MSCI All Countries World Index by 1% p.a., after fees, over five years or more;
Keep the overall MER within international equities below 0.40% p.a.; and
Minimise the number of managers to six or less unless there is a compelling return and/or risk proposition.

Performance benchmark: MSCI All Countries World ex Australia Net Dividends AUD

Configuration

SSGA Enhanced Indexed 52.5%

Harris Global Equities Benchmark Unaware Value 17.5%

Baillie Gifford Benchmark Unaware Growth 15.0%

Stewart Emerging Markets 8.0%

Sands Capital Emerging Markets 7.0%

Total 100%

 

Opportunistic growth

Sector objectives - N/A

Performance benchmark

Private equity:

25% S&P ASX300 Accumulation + 5% p.a.

75% MSCI World ex Aust Net Div (Unhedged) + 5% pa.

Opportunistic Property:

Mercer/IPD Australian Property Pooled Fund

 

Absolute Return Multi Strategy (ARMS)

Sector objectives:

Return at least 50%/50% bonds/equities index, over the long-term;
Mid-risk profile between equities and government bonds;
Diversification, particularly in equity down markets, and also in rising interest rate environment;
Relatively high liquidity; and
Not overly expensive (sector MER below 0.8% p.a.).

Performance benchmark: Bloomberg AusBond Bank Bill Index + 4.5% p.a.

Configuration

SouthPeak Real Diversification Fund 50%

Invesco Global Targeted Return Fund 50%

Total 100%

 

Alternative growth

Sector objectives

Return in excess of equities index, over the long-term;
Risk profile lower than equities;
Diversification, particularly in equity down markets, and also in rising interest rate environments; and
Relatively high liquidity.

Performance benchmark: Bloomberg AusBond Bank Bill + 5% pa.

Configuration

Bridgewater Pure Alpha Fund 100%

 

Infrastructure

Next review

Sector objectives

A return premium of at least 1.5% p.a. above a 50%/50% index of Bloomberg AusBond Government Bond 10 Years+ and ASX 300 Accumulation Index;
Mid-risk profile between equities and government bonds;
Diversification, through allocation to different risk exposures (e.g. regulatory);
Positive correlation to inflation to provide some inflation hedging; and
Moderate cost - sector MER below 0.60% p.a.

Performance benchmark:

50% Bloomberg AusBond Government 10yr+Index

+ 50% S&P/ASX 300 Accumulation Index + 3% pa

Configuration

IFM Australian Infrastructure 50%

IFM International Infrastructure 50%

Total 100%

 

Property

Sector objectives

To broadly match the return of its benchmark (Mercer/IPD Australian Pooled Property Fund Index) net of fees over ten years;
To target high quality core property portfolios with defensive characteristics;
Diversification, through an allocation to different property sectors (e.g. retail and office) and geographies; and
Moderate cost – sector MER below 0.60% p.a.

Performance benchmark

Listed Property - International: FTSE/EPRA NAREIT Developed Rental Index Hedged in AUD (Net of Fees)

Unlisted Property: Mercer/IPD Australian Property Pooled Funds (Net of Fees)

Configuration

AMP P Units 35.0%

ISPT 40.0%

Resolution Capital GLOBAL REIT 25.0%

Total 100%

 

Indexed Property

Sector objectives

None set

Performance benchmark: S&P/ASX 200 Australian Real Estate Investment Trust Index

Configuration

SSGA Passive AREIT 100%

 

Diversified bonds

Sector objectives

Low risk, which exhibits defensive characteristics and provides downside protection (a portfolio of longer duration investment grade government bonds and credit);
Performance consistent with the custom benchmark for the sector (50% Bloomberg AusBond Composite All Maturities Bond Index and 50% Barclays Global Aggregate ex-Australia Index (Hedged in AUD));
High liquidity; and
Low cost – sector MER below 0.20% p.a.

Performance benchmark:

50% Bloomberg AusBond Composite 0 + year Index

50% Barclays Glob Aggregate Composite.

Configuration

Amundi Aust Fixed Interest 50%

Brandywine Global Opp Fixed Income 15%

Amundi Int’l Fixed Interest 35%

Total 100%

 

Alternative debt

A stable yield premium to government bonds and cash, with performance of around 3% p.a. above the Bloomberg AusBond Bank Bill Index net of fees over three years;
A mid-risk profile between equities and government bonds;
Diversification through exposure to different debt markets (e.g. bank loans, emerging markets debt, asset backed securities, etc.);
Low duration strategies to limit direct exposure to rises in interest rates; and
Moderate cost - sector MER below 0.40% p.a.

Performance benchmark: Bloomberg AusBond Bank Bill Index + 3% p.a.

Configuration

IFM Specialised Credit 50%

Barings Global Loan and High Yield Bond Fund 50%

Total 100%

 

Cash

Sector objectives

Internal Cash Portfolio Investment Policy

To outperform the consumer price index (CPI) over rolling three year periods.
The portfolio is expected to achieve positive returns over all periods.
To provide liquidity for the purpose of daily cash flow requirements for the Cash options.
If the Cash Investment Portfolio is used for all Investment options with a Cash allocation, then it must also provide liquidity for the purpose of daily cash flow requirements and the asset allocation rebalancing of all Investment options. 

Performance benchmark: Bloomberg AusBond Bank Bill Index

Configuration

The Internal Cash Portfolio Investment Policy sets out

Eligible Investments
Security exposure limits
Counterparty / Issuer limits
Credit Rating exposure limits

 

Tail Risk Hedging

Sector Objectives

No sector objectives per se.  This is an overlay over the DB LASF Investment option. 

The TRH program is a DAA tool which will be turned on and off as considered appropriate.  When active, the objective of the program is to provide a better risk return profile for the LASF Investment option than a portfolio with a similar risk profile without the program (i.e. one with more bonds and less equities).

Performance benchmark: No asset class benchmark

Manager benchmark:

Portfolio Investment Risks: 0.63
Reference Investment Portfolio Equity Beta: 0.63
Attachment Point: 15%
Investment Hedge Horizon: 12 months
Target Expense (Costs) Level (basis points): 50 to 70 basis points

Configuration

PIMCO Tail Risk Protection: 100%

 


OO 07. Fixed income AUM breakdown

07.1. Provide to the nearest 5% the percentage breakdown of your Fixed Income AUM at the end of your reporting year, using the following categories.

Externally managed
64.82 SSA
3.51 Corporate (financial)
24.84 Corporate (non-financial)
6.82 Securitised
Total 99.99%

OO 08. Segregated mandates or pooled funds

New selection options have been added to this indicator. Please review your prefilled responses carefully.
Provide a breakdown of your organisation’s externally managed assets between segregated mandates and pooled funds or investments.
Asset class breakdown
Segregated mandate(s)
Pooled fund(s) or pooled investment(s)

Total of the asset class

(each row adds up to 100%)

[a] Listed equity
100%
[b] Fixed income - SSA
100%
[c] Fixed income – Corporate (financial)
100%
[d] Fixed income – Corporate (non-financial)
100%
[e] Fixed income – Securitised
100%
[f] Private equity
100%
[g] Property
100%
[h] Infrastructure
100%
[j] Hedge funds
100%
[p] Other (1), specify
100%
[q] Other (2), specify
100%

08.2. Additional information. [Optional]

Vision Super's private equity portfolio allocations with the exception of a few investments are  allocated via a Fund of Fund Model approach with underlying General Partnerships which is inclusive of property opportunity portoflios. Managers who invest directly into underlying companies, via co-investments, undertake an analysis of ESG risks and opportunities within their due diligence process which forms part of the discussion at internal investment committees. The evaluation of these risks is customised to the specific sectors and markets in which those businesses operate. Managers assesses the impact of a range of criteria on the underlying business, including the climate-related risks.

Diversified Bonds (Fixed Income) is composed of a sub-sector asset class named "Alternative Debt" consisting of two Pooled Fund arrangements through the Barings Global Loan and High Yield Bond Fund, IFM Specialised Credit Fund (Floating) and Brandywine Global Opportunistic Fixed Income portfolio.

The Absolute Returns Multi-Strategy (ARM's) asset class is allocated via trusts/pooled funds through Invesco and SouthPeak Investment Management.

The Hedge Fund allocation (we name as Alternative Growth asset class) via Bridgewater Associates is invested within the Pure Alpha Fund. 

Other 1: Tail Risk Hedge Protection Program

Other 2: Absolute Returns Multi-Strategy


OO 09. Breakdown of AUM by market

09.1. Indicate the breakdown of your organisation’s AUM by market.

85.3 Developed Markets
4.07 Emerging Markets
0.17 Frontier Markets
10.46 Other Markets
Total 100% 100%

09.2. Additional information. [Optional]

Further to Note OO 09.1 - Breakdown of AUM by Market

Classification follows MSCI Indices.

Other Markets consist of the following breakdown:

  • Private Equity
  • Property Opportunties
  • International Infrastructure
  • Property
  • Alternative Growth
  • Absolute Return Multi Strategy

Emerging markets refers to portfolio allocations from asset class sectors within our international equities and diversified bonds portfolios. For diversified bonds there is a sole active manager who can allocate to emerging market debt where emerging markets are defined as Non-World Government Bond Indices (WGBI) markets with local currency long-term rating below A- (or the equivalent). These are generally assigned by all Nationally Recognized Statistical Rating Organizations (Standard & Poor's Ratings Services, Moody's Investors Services and Fitch, Inc.) that provide such a rating.

The debt universe encompasses a large number of sub-strategies with a broad range of risk/return profiles. In essence, the manner and extent to which ESG incorporated into the investment process will differ across managers and strategies (e.g developed market government bonds versus emerging market debt).

Observations overall are that the integration of ESG into the investment process is less developed within the debt universe compared to equities. Whilst the vast majority of debt managers are cognisent of ESG, the level of integration and relevance to debt products is mixed. Both our asset consultant and  management placed more emphasis on drawing attention to ESG and emphasing its importance at both the firm and investment level with relevant managers.


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