Our investments are divided into units. The value of the units when you join, buy or sell an asset or investment option is the foundation of how your account is valued.
Each investment option is divided into units. When you go into an option (e.g. by making a contribution or switching your investment), you buy units. When you leave an option (e.g. by making a withdrawal), you sell units.
The value of your investment in a particular option is the number of units you hold in that option, multiplied by the unit price.
Hypothetically, if you invest $100 in an option when it has a unit price of $10, you will receive 10 units. When you are ready to leave the option, it has a unit price of $20, so your 10 units are now worth $200. This growth is your positive return.
Similarly, if you invest $100 in our Shares option when it has a unit price of $10, you will receive 10 units. In the next month, the unit price could be $9 dollars. This means your investment is now worth $90. This is called a negative return.
How are unit prices calculated?
The unit prices for each investment option are calculated by dividing the value of the net assets in the option by the number of units on issue after allowing for costs (including fees paid to investment managers) and taxes.
A buy/sell spread is a fee that can be charged each time you buy or sell units in an option. Australian Catholic Superannuation does not charge a buy/sell spread.
Unit prices and investment switches
You can change your investment options at any time.
Investment switches are processed on a forward-pricing basis. This means your switch will be processed at unit prices that are set after your switch application is received.
Unit prices are normally set on a Tuesday; to receive the unit price for a particular Tuesday your application must be received by the close of business (5:30pm Sydney time) on the previous Friday.
Your balance in the options you are exiting is calculated using the unit prices and is then reinvested in the new options with the number of units calculated using the unit price of your new options.
Unit pricing and investment returns
Member account values are based on weekly unit prices and the timing of contributions, withdrawals and fees. These unit prices are usually declared each Tuesday and account for the value of trade through the Friday prior.
The value of your account is calculated week-to-week using these unit prices.
These returns only apply if you were invested in the relevant option for the whole period and made no changes to your account. If this does not describe you, your effective return may be different.
For example, a member who makes a large contribution when the unit price was low is likely to have a higher effective return than a member who made the same contribution when the unit price was high.
Fund return compared to a member return
Our annual return for each investment option is generally measured from 1 July to 30 June after all valuations from investments are received.
End of financial year unit prices
We have an additional unit price on 30 June each year to ensure that we properly value your account at the end of each financial year using the most recent market valuations.
What happens if unit prices prejudice members’ interests?
The Trustee may take action if unit prices could prejudice member’s interests by:
- ‘Freezing’ transaction processing in the event of a greater than +/- 5% daily cumulative movement in the value of any investment option until an appropriate revised unit price can be determined.
- Changing any unit price where the price would prejudice or damage the interests of members in that investment option (e.g. the unit price no longer fairly reflects the value of the underlying assets).
Unit pricing errors
Although the Trustee has established rigorous procedures to minimise the risk of unit pricing errors, an error is possible if, for example, valuation information received from an investment manager is incorrect.
In the event of an error, the Trustee has procedures that will be followed. For example, current members who have been materially disadvantaged would have extra units added to their account balance to compensate for any loss.