How NGS manages investments

The investment strategy and objectives for each of our investment options are formed under the following principles:

Expert management — we employ professional investment consultants and external investment managers to assist us with selecting and managing our investments.

Liquidity — sufficient liquidity is maintained in order to meet our needs for expected cash flow.

Diversification — investment risk is limited through investment diversification. We invest in different asset classes, diversify within the asset classes themselves, and diversify between the different investment managers we employ.

Review — our trustee directors regularly review the performance of each investment manager with the assistance of our asset consultants and custodian.

Each investment option — with the exception of a few, including Cash and Term Deposits, Australian Shares, and International Shares — has a mix of asset classes. Asset classes are categorised as either defensive or growth assets, or a mix of both.

Defensive assets  — these are generally included in an option to stabilise returns. Defensive assets typically receive a large component of their return as income. These assets are lower-volatility investments, but that means they generally produce lower returns over the long term. 

Growth assets — we use these to provide capital growth to an investment portfolio, along with some income. Growth assets are riskier than defensive assets but, over the long term, are expected to produce higher returns. 

The weighting of individual asset classes depends on the objectives and strategy for the particular investment option. Please see our Investment guide for a full list of our asset classes, and our Specific investment options page for the weighting of asset classes within individual investment options.

Indices like the Dow and All Ords are not the basis of valuation of our unit prices. Instead, we use active and passive investment managers.

Active investment management — our active investment managers closely follow and make judgements on market movements. While monitoring the market, they make decisions to buy or sell parts of our investment portfolio, thereby taking opportunities to out-perform the market or ‘index’.

Passive investment management — passive investment managers aim to achieve a return that replicates the average market return for a particular index, like the ASX300. This means that they’re not actively making decisions on timing or selection of investments — instead, they mirror the weightings of companies in a selected index.

We use responsible investment policies and environmental, social and governance (ESG) principles to manage risk within our investment portfolio and provide our members with better risk-adjusted returns.