Mercy Super - Always for you

Members have the ability to choose from five Investment Options:

 

• Balanced Growth (Default)
• Balanced
• Shares
• Cash
• Socially Responsible

 

Each Investment Option has been structured differently to cater for different risk profiles that members may have. The actual asset allocation for the various Investment Options are reviewed and monitored on a regular basis.

 

Mercy Super suggests that you consider obtaining personal financial advice to ensure that your personal needs have been met. Currently, neither the Trustee, your employer or any staff associated with the Fund can advise you which Investment Option to choose, though we can help you with all the information you need.

 

The Trustee with the assistance of its Investment Consultant selects a number of professional Investment Managers to manage the various investment options of the Fund. The managers are monitored regularly, and may be changed by the Trustee at any time. Any changes to the Fund's Investment Manager line-up will be communicated to members in the Fund's Annual Report.

 

A summary of the current investment objectives and strategy for each Investment Option can be viewed by clicking here or downloading the resource to the right.

 

 

Switching Investment Options

 

You can switch your investment option on a weekly basis at no cost. If your completed Change of Member Investment Choice form is received by close of business on a Wednesday, your switch will be effective from the following Monday.

It should be noted however that the Trustee reserves the right to process your request at a later time should this be necessary for reasons such as market volatility. You will receive a letter confirming your investment switch after it has been processed.

 

What happens when I switch options?

 

When you switch from one investment option to another option, investment earnings, as well as any administration fees and contributions tax (where applicable), will be applied to your account.

 

Investment earnings will be applied to the date of switch based on the declared crediting rate for your existing investment option.  From that point, the investment earnings will be applied for the new investment option. 

 

In this way a closing balance is determined at the date of the switch. This becomes the starting balance for the new investment option.

 

Investment earnings are applied based upon the transactions in each month and are compounded monthly, that is each month's investment earnings are added to the previous month's balance together with any transactions in that month. Investment earnings are applied to each transaction based upon the number of days from the date of the transaction to the end of the calendar month.

 

Any administration fees will be calculated on a proportionate basis, based upon the period from 1 July, or date joined the Fund if later, and the date of switch. Contributions tax of 15%, less a credit for any insurance premiums deducted, will be applied to any concessional contributions received up to the date of switch. Concessional contributions are generally those made by your employer or those made by salary sacrifice (before tax).

 

Am I locking in any investment losses when I switch?

 

Yes, if you switch investment options (to a defensive option) at a time when the market has fallen, the negative investment earnings will be applied to your superannuation, or income stream account. However, those earnings will apply in any event. The real issue is that you will be out of the market and therefore not able to participate in any market rises that occur.

 

It is natural for people to feel concerned, during periods of share market volatility, about the impact upon their superannuation.  However, trying to time the markets and switch investment options could leave you worse off. Superannuation is a long term investment and therefore your investment strategy should not be influenced by short term movements in the market. It is generally best to stick to your strategy and ride out any short term volatility.

 

If you would like to discuss any of these issues, or review your superannuation investment strategy, please call our Client Service Team on 1300 368 891.