Most super funds have an investment philosophy. TWUSUPER's investment philosophy describes the underlying principles the Fund follows when determining how we invest our assets.
Our investment philosophy reflects the following investment beliefs:
- good Fund governance is essential
- asset allocation is the dominant driver of returns
- diversification is the key to mitigating risk
- active management can add value, and
- Environmental, Social and Governance (ESG) factors can impact the Fund.
TWUSUPER’s investment philosophy drives many of our investment decisions – such as our investment strategy, how we build our investment portfolio and choosing investment managers.
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 fulfiling appropriate governance and oversight of investment decision-making:
- Asset consultant: TWUSUPER uses JANA Investment Advisers to help set investment strategy, select investment managers and monitor performance.
- Investment team: Our in-house investment team manages the day-to-day business of investing the Fund's assets.
- Investment Committee: 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.
- 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 SuperFunds:
- 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.