Shares at Rest
The Rest investment options that invest in shares diversify across many different companies in different industries or sectors. That way, your super can look to enjoy the benefits of investing in shares over the long term, while managing the associated risks of any one company.
For each investment option that has an allocation to shares, the recommended timeframe for investing is generally longer, the higher the allocation. This minimises the risk associated with shares over shorter timeframes.
Australian Shares
Many Australians are more comfortable with Australian shares. The ASX consists of many familiar, well-established names (also referred to as 'blue chip' stocks), such as Woolworths or Commonwealth Bank of Australia.
Australian shares can also offer tax incentives such as franking credits, where you receive a tax credit for tax which has already been paid by the company you own. This can help boost your total return and this is factored into your super balance if you’ve selected an option which invests in Australian shares.
Rest manages a portion of the Australian share portfolio internally. We also use the expertise of external fund managers. Each of these managers have their own style. We employ a range of different investment managers to diversify between different management styles and to take advantage of their different strengths.
Investors should note that the Australian share market only accounts for about 2.5% of the world’s share markets and is heavily concentrated in industries such as finance and mining. This means the Australian share market is less diversified than other share markets. A diversified portfolio is generally better prepared to manage risk in case some of the major industries in Australia don’t do well.
Overseas Shares
Overseas markets offer many opportunities for investors. Many of these companies would be very familiar to Australians as well, from the Silicon Valley tech companies you likely use every day like Google to the Japanese automobile manufacturers who make many of our cars. More variety offers more diversification which helps to manage risk.
All of Rest’s structured investment options have allocations to both Australian and Overseas Shares. Rest’s Overseas Shares asset class also includes an allocation to private equity investments, where we invest in companies that aren’t list on the stock exchange.
Rest uses the expertise of external fund managers to find attractive overseas listed share investments. Again, each manager has their own style, offering different benefits.