• Valuation of Fund assets

  • The Trustee employs an independent custodian to value the Fund’s assets and liabilities on a regular basis. This valuation is used to determine unit prices for each investment option.

    Some assets are valued more frequently than others

    The Fund invests in assets (such as Australian shares) which are traded on active investment markets. These assets can be regularly valued so that the valuations used in calculating weekly unit prices are relatively up-to-date.

    The Fund also invests in assets (such as direct property, alternative assets and private equity) which are not traded on active investment markets. These assets are included to enhance return and diversify risk. However, it may be difficult to obtain accurate and up-to-date valuations of these assets for the purpose of setting weekly unit prices. For example, commercial buildings are typically re-valued annually.

    The Trustee has adopted strategies to reduce the impact of infrequently valued assets, including:

    • The proportion of infrequently valued assets in each investment option is limited
    • Investment managers are required to use robust valuation methods. For example, properties within a portfolio must be re-valued on a staggered basis. Managers may use methods such as indexation to estimate the value of assets between formal valuations.


    Impact of tax losses on valuations

    If the Fund suffers capital losses, the losses can be carried forward until they can be offset against future capital gains. The future tax savings that can result from these losses are assets for the Fund. These assets are called future tax assets or deferred tax assets.

    Future tax assets are included in the valuation of the Fund’s assets and therefore flow through to the unit prices of the superannuation options. This means that the members who suffer investment losses can benefit from any future tax savings. 

    The Trustee has established a policy to determine how these tax assets will be estimated and how they will be included in unit prices. For example, the Trustee applies a cap to the amount of future tax assets that can be included in unit prices.

    Future tax payable is also included in superannuation unit prices. Future tax assets and future tax payable are not included in the unit prices of the pension options, as no tax is payable on earnings in the pension phase.

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