The funds invested in the Westscheme "Cash" Option have been managed by ING Investment Management (INGIM) in a portfolio of high quality investment grade securities. Westscheme decided to invest with INGIM with the aim of generating moderately better performance than that of the cash benchmark.
Since mid 2007, there has been a dramatic change in global credit conditions resulting in sharp falls in the price of credit securities, including those in the Westscheme “Cash” Option. This has adversely affected the performance of the “Cash” Option, which has significantly underperformed its benchmark over the course of the 2007-08 financial year. Although credit markets stabilised somewhat over the course of April and May in 2008, in June there was further deterioration in credit markets led by renewed concerns in the strength of the global banking system.
Volatility of the ING product is likely to remain high over the near term and possibly longer. With this in mind, Westscheme has decided that its MIC “Cash” Option should be invested in a cash product that seeks to produce returns in line with the benchmark with confidence and low levels of volatility. Consistent with this the MIC “Cash” Option has been invested in the Colonial First State Wholesale Premium Cash Fund since 1 September 2008. MIC “Cash” members can expect a gross return (that is, before fees and taxes) in line with the cash benchmark (that is, the UBS Bank Bills Index).
27 October 2008
Trustee: Westscheme Pty Ltd AFSL 232709 ABN 33 009 194 218 RSE Licence No: L0000581
Westscheme ABN: 68 559 391 482 SFN: 1353/119/43 RSE Registration No: R1000825