The Conservative Balanced strategy generally invests a proportion of its funds in growth assets such as Australian and international equities and property, semi liquids and private equity and the balance in income-producing assets, such as interest-bearing securities. This combination offers real investment growth above the CPI rate over a 10-year period. There are more assets that produce income, which makes the strategy more stable than the High Growth and Balanced strategies.
Conservative Balanced (Appreciator)
Objective
2.0% net return p.a. above CPI over a rolling 10-year period
Risk Profile
Medium to High
Suggested Investment timeframe
7 years
Disclaimer and assumptions
Below is a short explanation of some of the terms used on this page.
Objective: The investment results the fund aims to achieve over a set timeframe.
Asset class: A category of financial assets. The major classes are shares, property, fixed interest and cash, which in turn can be broken down to include Australian or international shares, Australian and international fixed interest and direct and indirect property. All asset classes have different risk and return characteristics.
ASSET CLASS DESCRIPTORS
Australian Equities: Investments in shares of companies listed on the Australian Stock Exchange. Offers potential for capital growth and also generates income in the form of dividends.
International Equities: Investments in shares of companies listed on different stock exchanges around the world. Offers potential for capital growth and also generates income in the form of dividends.
Australian Direct Property: Direct investments in Australian office buildings, shopping centres, industrial facilities and wholesale property funds. Unlisted direct property has a stable return and low correlation to more traditional asset classes.
International Listed Property: Provides diversification through shares in professionally managed real estate investment trusts (REIT’s) across developed countries. Includes investments in traditional real estate sectors as well as alternative asset classes like self-storage, healthcare and datacenters.
Private Equity: Investments in private companies (companies that are not publicly listed). Income is received from the profits made by these companies via their investments.
Private Credit: Privately negotiated loans and debt-financing from non-bank lenders. Also known as ‘direct lending’ or ‘private lending’. Income is received from the interest charged.
Growth Alternatives: Investments that sit outside of, and behave differently from, traditional asset classes, e.g. hedge funds, managed futures, derivatives contracts, commodities.
Short-Term Fixed interest: Investments that pay out a set level of cash flow to investors, typically in the form of a fixed interest or dividends.
Bonds: Fixed-income instruments that represent a loan made by an investor to a borrower, typically a government or a corporation. A defensive asset, bonds are less risky than growth assets like shares and property.
Infrastructure: Investments in physical assets and related operations that provide businesses and society with essential services e.g. roads, airports, transport and utilities.
Managed Cash: A traditionally conservative investment class that provides steady returns. Value fluctuates with interest rates. Returns tend to be the lowest of all asset classes over time.
Illiquid Assets: Illiquid assets are defined as follows: Australian Direct Property; Private Equity; Private Credit; Growth Alternative except Attunga Fund; Infrastructure; International Equities (Only Challenger Index Plus Fund)
OTHER ASSETS
International Equities Passive: A return guaranteed termed product provided by Challenger and benchmarked against MSCI ACWI ex Australia 40% hedged to AUD.
Pendal Smaller Companies Trust: An actively managed portfolio by Pendal investing in companies outside the top 100 listed on the ASX
JPM Liquidity: A liquidity product managed by JPM, funds held in this product can be redeemed same day.
