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Vision Super

PRI reporting framework 2020

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 100,287) not to make profit for shareholders.

Breakdown of Membership Numbers as follows:

Accumulation members: 77,857

  1. Personal: 8,207
  2. Super Saver: 69,650

Defined Benefit: 8,993

Retirement: 5,230

 


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).

98.89 FTE

02.4. Additional information. [Optional]

Further note for Item OO 02.3:

As at the end of Dec 2019, FTE was 98.89 (headcount was 103). Please note this includes employees who were on maternity leave but still employed by Vision Super. It is 97.89 FTE without the maternity leave employees.


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 100,287 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.

30/06/2019

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 held by Vision Super Pty Ltd As the Trustee for the Local Authorities Superannuation Fund.


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% 43.1
Fixed income 0 0 10-50% 17.54
Private equity 0 0 <10% 2.72
Property 0 0 <10% 7.86
Infrastructure 0 0 <10% 9.18
Commodities 0 0 0 0
Hedge funds 0 0 <10% 0.69
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% 13.31 0 0
Money market instruments 0 0 0 0
Other (1), specify 0 0 <10% 0.08
Other (2), specify 0 0 <10% 5.52

`Other (1)` specified

          
        

`Other (2)` specified

          
        

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 as at 30 June 2019

Australian equities

Objectives:

- 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

Manager configuration:

- IFM Low Carbon Emission Mandate = 53.0%

- Realindex Small Cap = 15.0%

- Airlie Industrial Shares = 17.0%

- Wavestone = 15.0%

 

International equities

Objectives:

- 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

Manager 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%

 

Opportunistic growth (private equity)

Performance benchmark:

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

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

 

Absolute return multi strategy

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 + 3.5% p.a.

Manager configuration:

- SouthPeak Real Diversification Fund = 50%

- Invesco Global Targeted Return Fund = 50%

 

Alternative growth

Objectives:

- Returns in excess of the Bloomberg Ausbond Bank Bill Index Plus 5% p.a. over the long term;

- Risk profile lower than equities;

-  Diversification, particularly in equity down markets, and also in rising interest rate environments; and

- A high probability that the investments can be fully liquidated within a three month timeframe.

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

Manager configuration: Bridgewater Pure Alpha Fund = 100%

 

Infrastructure

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

+ 1.5% pa

Manager configuration:

- IFM Australian Infrastructure = 50%

- IFM International Infrastructure = 50%

 

Property

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:

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

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

Manager configuration:

- AMP Capital Diversified Property Fund = 35.0%

- ISPT Core Fund = 40.0%

- Resolution Capital Global REITs = 25.0%

 

Indexed property

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

Manager configuration: SSGA Passive Australian REITs = 100%

 

Diversified bonds

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% FTSE World Government Bond Index

Manager configuration:

- Amundi Aust Fixed Interest = 35%

- Amundi Aust Inflation Linked Bonds = 15%

- Amundi Int’l Fixed Interest = 35%

- Amundi Int’l Inflation Linked Bonds = 15%

 

Alternative debt

Objectives:

- 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.

Manager configuration:

IFM Specialised Credit Fund = 40%

Barings Global Loan and High Yield Bond Fund = 25%

Brandywine Global Opportunistic Fixed Income = 35%

 

Cash

Objectives:

- To outperform the Bloomberg AusBond Bank Bill Index

- 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.

Performance benchmark: Bloomberg AusBond Bank Bill Index

Manager configuration:

The Internal Cash Portfolio Investment Policy sets out:

- Eligible Investments

- Security exposure limits

- Sector limits

- Counterparty / Issuer limits

- Credit Rating exposure limits

- Liquidity limits

 

Tail risk hedging

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

Manager 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
79.81 SSA
5.01 Corporate (financial)
12.06 Corporate (non-financial)
3.08 Securitised
Total 99.96%

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 portfolios. 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 Committee meetings. The evaluation of these risks is customised to the specific sectors and markets in which those businesses operate. Managers assess 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", which consists of two Pooled Fund arrangements (Barings Global Loan and High Yield Bond Fund and IFM Specialised Credit Fund Floating) and also a discrete mandate with Brandywine who manages the 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 (which we label the "Alternative Growth" asset class) is 100% via the Pure Alpha Fund which is managed by Bridgewater Associates. 

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.

84.34 Developed Markets
5.54 Emerging Markets
0.14 Frontier Markets
9.98 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 Opportunities (now part of private equity)
  • International Infrastructure
  • Property
  • Alternative Growth
  • Absolute Return Multi Strategy
  • Alternative Debt
  • Cash

Similar to our summary in last years reporting submission, emerging markets exposures are allocated via our international equities and alternative debt portfolios. For alternative debt we have a dedicated active manager who can allocate to emerging debt where emerging markets are defined as Non-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 Organization (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 consent 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 emphasizing its importance at both the firm and investment level with relevant managers. 

 


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