Investment beliefs and governance
TWUSUPER’s investment beliefs reflect the characteristics of our membership, scale, comparative advantages and operations.
We believe that:
- strong governance supports good decision-making and leads to optimal investment performance
- member outcomes are principally measured through returns after fees and taxes relative to prevailing inflation
- net investment performance and fees should be competitive relative to peer funds
- strategic asset allocation is the dominant factor that determines investment returns and risks
- TWUSUPER gains a comparative advantage through its long-term investment horizon and by seeking out niche opportunities that are suited to smaller investors
- appropriate diversification is critical to maintaining an effective and efficient investment strategy
- appropriate management of environmental, social and governance (ESG) factors contributes to higher long-term investment returns, mitigates risk and supports the Fund’s role as a responsible member of the Australian investment community
- the optimal model to implement investment strategies is to outsource asset management to appropriately qualified and experienced investment managers that are fit for purpose
- active management can add value in markets that are relatively less efficient and where there are highly skilled managers that can take advantage of mispricing opportunities to enhance returns
- effective management of investment fees, costs and taxes can materially improve net returns.
Good governance is an essential requirement for achieving sustainable investment returns. The key to good governance is setting clear objectives, delegating tasks to those best skilled to carry them out and providing effective oversight. The following parties assist the Fund in fulfilling appropriate governance and oversight of investment decision-making:
TWUSUPER uses JANA Investment Advisers to help set investment strategy, select investment managers and monitor performance.
Our in-house investment team manages the day-to-day business of investing the Fund's assets.
The Fund's Investment Committee comprises four Trustee Directors (with the Committee Secretary being the Fund's Chief Investment Officer) and meets at least quarterly to review the Fund’s investments. The Investment Committee has certain powers delegated to it by the Trustee Board.
The Trustee Board ensures TWUSUPER looks after the best interests of all members and includes both employer and employee representatives. Our Board structure is recognised by peak super bodies such as the Australian Institute of Super Trustees (AIST) and the Industry Funds’ Forum as providing a best governance model for Australian Industry Super Funds:
- an Independent Chairman
- four employee representatives, nominated by the Transport Workers’ Union of Australia (TWU)
- four employer representatives, nominated by the Australian Road Transport Industrial Organisation (ARTIO)
- up to six alternate directors, nominated by their respective representatives.
Long-term strategic asset allocation is the dominant driver of investment returns. The Trustee also believes that asset classes can become overvalued or undervalued at times, presenting an opportunity to either enhance returns or reduce risk.
Investing in a diverse range of asset classes, investment strategies and investment managers is a key means of lowering overall risk while providing scope for good returns.
The Trustee employs active management strategies where it is confident that the likely level of outperformance outweighs the additional cost of active management.
Companies that properly manage environmental, social and governance (ESG) issues are likely to be more financially sustainable and perform better over the long term.