Superannuation Rolling Crediting Rates 07/08

Objective: The Diversified Fixed Interest Option seeks stable returns over the shot to medium term through reduced exposure to risk. It aims to out-perform a weighted average of the UBS Australian Composite Bond all Maturities Index and the Citigroup World Government Bond All Maturities ex-Australia Index (before fees and tax).

Strategy: This option provides stable returns in the short to medium term. It consists of investments in international and domestic bonds. The international bonds are fully hedged against foreign exchange fluctuations. The domestic fixed interest portion of the option invests in government and investment-grade corporate bonds. The international fixed interest portion of the option invests in government bonds hedged against currency movements.

Level of risk: Low. This option has exposure to market risk through credit risk. In comparison with other options, there is reduced exposure to market risk. The option is exposure to government credit risk in Australia and other OECD countries. The exposure to market risk through government default is low. The option is exposure to corporate credit risk in Australia. It invests in investment-grade bonds, resulting in exposure to market risk.

Typical investor: Members who seek stable investment with limited capital growth opportunity.

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