Standard Risk Measures
The Standard Risk Measure system is an industry-wide measure that classifies investments according to their risk level and aims to help members easily compare investment options. A risk band number and risk rating label has been assigned to each investment option in accordance with the Standard Risk Measure risk band classification system developed and introduced by ASFA/FSC in July 2011.
Depending on the number of expected negative annual returns over a 20 year period, each investment option is graded across seven ‘risk bands’, as follows:
|Risk Band||Risk Label||Estimated number of negative annual returns over any 20 year period|
|1||Very Low||Less than 0.5|
|2||Low||0.5 to less than 1|
|3||Low to Medium||1 to less than 2|
|4||Medium||2 to less than 3|
|5||Medium to High||3 to less than 4|
|6||High||4 to less than 6|
|7||Very High||6 or greater|
Please note that the Standard Risk Measure is not a complete assessment of all investment risk that may apply to your super. For example, it doesn’t consider the potential size of a negative annual return or that a positive annual return could be less than you need to meet your investment objectives. You should refer to the Investment Guide for information on other risks that apply to super investments.
Nationwide Super’s investment options
|Risk of a negative return||Risk Band||Risk Label|
|Nationwide MySuper (Default)*||The estimated number of negative annual returns over any 20 year period is 3.5||5||Medium to High|
|High Growth||The estimated number of negative annual returns over any 20 year period is 4.2||6||High|
|SRI/Ethical||The estimated number of negative annual returns over any 20 year period is 3.5||5||Medium to High|
|Prudent||The estimated number of negative annual returns over any 20 year period is 1.6||3||Low to Medium|
|Cash||The estimated number of negative annual returns over any 20 year period is nil||1||Very low|
* For Personal Division and Pension Division members, this is the Diversified investment option.
How Nationwide Super’s Standard Risk Measures are calculated
The estimated number of negative annual returns over any 20 year period for Nationwide Super’s investment options is calculated based on investment assumptions developed by our asset consultant, Mercer Investments (Australia) Pty Ltd (ABN 66 008 612 397, AFSL 244385).
Mercer calculates our Standard Risk Measures:
- Based on Mercer’s expectations of the long-term performance of various asset classes under normal circumstances
- Before administration fees and taxes (including franking credits) are considered
- After investment management fees are considered
- Using a conservative approach that is regularly reviewed – however, please note that the target asset allocation of the options and Mercer’s long term capital market assumptions may change over time