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Investment Choice
MARF has four (4) investment options for you to choose from, specifically designed to meet different investment objectives. This comprehensive range of options has been chosen to cater for the short, medium and long-term needs of members.
| Investment Options |
| Capital Conservative |
| Balanced Growth |
| Aggressive Growth |
| Australian Shares |
These options provide access to the various asset classes, including property securities, Australian and international shares, cash, fixed interest etc. Each option invests in these areas to varying degrees depending on whether the focus is on growth, securing capital or a balance between these investment objectives and the investment strategy of MARF.
The Investment Process
When your contributions are paid into the fund, your money is combined with other members’ money and invested in the investment options chosen. Each investment option invests in assets which are managed according to the investment option’s objectives.
Social / Ethical Considerations
No consideration is directly given to labour standards or environmental, social or ethical considerations in the investment decisions. However, underlying fund managers used may or may not give consideration to these issues.
You should consult a licenced financial adviser before making any investment decisions.
Changing your investment options
You can choose to invest in one, some or all of these options. You can change investment options (called “switching”), at any time; however a change to the existing investment allocation will take effect on the first working day of the following month. For example: an investment choice request received on 30th June will be processed on the first working day in July, being the following quarter.
There are no fees levied when switching your investment options. To make a switch, simply complete an Investment Choice Application Form. Your future contributions will be invested into the newly selected investment options(s) along with your existing member balance. We will then send you a switch advice confirming the details.
You should consult with your financial adviser before switching Investment Options.
What is the difference between each investment option?
Investment option has different investment objectives (goals) and strategies (ways of achieving those goals). The mix of investments used varies according to the objective of each option. There is a risk that your investment in an option will fall in value from time to time.
Asset allocation benchmarks are in essence a target position. Although the investment mix can change significantly and quickly, depending on what is happening in the markets, all things being equal, this benchmark should be the investment mix of the investment options.
All investments placed within each of the investment options are done by investing directly in the underlying assets and through other managed funds as chosen by the Trustee.
What is the difference between defensive and growth assets?
Generally, investments are purchased for their income producing potential (known as defensive assets) or because the capital value is expected to grow over time (known as growth assets).
Defensive Assets
Defensive assets include bank deposits, mortgages and debentures with major finance companies. The main advantage of these methods of investment is that the original capital invested is very secure. This is because the investment organisation takes all the investment risks and guarantees to pay back the capital at the end of the period of investment. They may pay a defined income return for a specified period, so the rate of return is known in advance.
Two disadvantages of interest income are that:
1. the return is fully taxable in the year in which the interest is received; and
2. there are no tax concessions available.
Additionally, the original capital does not usually grow in value so the investment does not have the potential to maintain its purchasing power against inflation.
Thus, defensive assets provide good security and may provide a defined income stream for a time period, but they are not tax efficient and their value may not grow over time.
Growth Assets
Growth assets include property, Australian and international company shares, and a range of more specialised investments, some of which are riskier than others. Capital growth occurs when investors collectively believe that future profits or rental from an asset will be higher in the future than today and are therefore prepared to pay more to purchase the asset. Similarly, capital values fall if investors collectively believe that future profits and rentals will be lower in the future than today. For example, capital values may fall if investors believe that the economy is heading for a downturn.
As investors’ perceptions about the future change, the value of capital growth investments fluctuates. However, in the long run, the returns on capital growth investments are likely to outperform fixed interest and cash investments. This is particularly true if the investment is based on company profits from reputable companies and property rental from quality buildings.
The main advantage of growth assets is that it is possible to take advantage of favourable economic conditions and achieve superior growth over the medium to long term.
There are three advantages to investing in capital:
1. The income received.
2. The tax advantages that may apply.
3. The long term increase in the value of the capital.
A disadvantage is that the original capital value may rise and/or fall over time.
MARF Property Management Trust
MARF is the sole holder of units in and beneficiary of the MARF Property Management Trust, of which Christaview Pty Ltd if the Trustee.
The major investment of the MARF Property Management Trust id a commercial property, the tenants of which include the Administrator. The income derived by the MARF Property Management Trust includes rent paid by the Administrator, at commercial rates pursuant to the formal written lease agreement. The exposure to the MARF Property Managment Trust is part of the asset allocation of the Balanced Growth Investment Option.
Derivatives
The Trustee does not enter into any derivative contracts on its own account, although some underlying Fund Managers may have derivaties exposure in their portfolios.
Hedge Funds
The Trustee has authorised, and will continue to permit exposure to, the asset class commonly referred to as “Hedge Funds”. These investments, also known as “absolute return” investments, have their overall objective to produce positive returns not defined or measured against any one benchmark. While these investments can be considered high risk, the fund exposure is limited to products having carefully selected, multiple fund managers to diversify some aspects of this risk.
What is the Default Investment Strategy?
When you apply for membership of the fund, you must nominate your investment choice. If you do not select an available option, or your choice is unclear, your investment will be allocated to the default investment strategy, which is 100% Balanced Growth.
Unsupported Investment Options
The Trustee may at its discretion vary the Investment Options available within MARF from time to time and will give notice to members affected by those changes. If the Trustee decides not to continue offering an Investment Option in which a member has given us a nomination to invest, or in which a member’s Account has been invested under a default Investment Option, we will send the member a fresh nomination request.
If a member does not send us a valid and complete nomination, his or her Account will be transferred to a default Investment Option as determined by the Trustee and notified to the member at the time. If Investment Options are unavailable for reasons beyond the control of the Trustee, the Trustee has the discretion as to how to deal with the Accounts of members affected by the unavailability. In some cases, it may be necessary for the Trustee to invest the Accounts of members affected by the withdrawal of an Investment Option in a default Investment Option determined by the Trustee as an interim measure until the Trustee has the opportunity to obtain a fresh nomination from the member.
Investment Options summary
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Aggressive Growth |
Balanced Growth |
Capital Conservative |
Australian Shares |
| General Objective |
To achieve a return of at least 3.5% above CPI over rolling 5 year periods. |
To achieve a return of at least 3% above CPI over rolling 5 year periods. |
To achieve no loss of capital and to exceed the CPI by 2% over rolling 3 year periods. |
To exceed the ASX 200 by 1% p.a. over rolling 5 year periods. |
| Asset Allocation |
Cash
Australian Share Trusts
International Share Trusts |
Cash
Bonds
Mortgage Facilities
Indirect Property
Australian Share Trusts
International Share Trusts |
Cash
Bonds
Mortgage Facilities
Australian Share Trust
International Share Trusts |
Cash
Australian shares
Listed property trusts
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| Asset Allocation Benchmarks |
85% Growth
15% Defensive |
65% Growth
35% Defensive |
35% Growth
65% Defensive |
95% Growth
5% Defensive |
| Investor time horizon |
5 years or more |
5 years or more |
2 - 5 years |
5 years or more |
| Level of risk |
High |
Medium |
Low to Medium |
High |
| Level of return |
High |
Medium to High |
Medium |
High |
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