The fund’s investment committee has supported and overseen these asset allocation calls. “You need to have commitment – to know your plan and investment beliefs,” Hill says. “People who have lived those investment beliefs know what they mean in times of dislocation.” Other beliefs include diversification of investments across asset classes, a preference for active managers instead of index-tracking funds and cost reduction.
Mitigating the impact of market downturns is crucial. About 42 per cent of REST members were aged 25 or younger at November 2011. But the fund does not increase investment risk because its members have enough years to recover from early losses. “Downside protection is critical,” Hill says. “Even though we have one of the youngest demographics out there, it’s not simply a case of loading up with growth assets because they’ve got time. They need to have confidence in the process and what we’re trying to achieve. If you start off with early negative returns, what is that going to do to their confidence?”
John Nolan is “quite influential” as the chair of REST’s investment committee and has held this position for a decade. Nolan is the managing director of Warakirri Asset Management and founded the fund’s current asset consultant, JANA Investment Advisers, in 1987. Hill says other committee members also provide a “strong contribution” to REST’s investment strategy. Joe De Bruyn, secretary of Australia’s largest union, the Shop, Distributive and Allied Employees Union (SDA), has been on the fund’s board since it’s beginning. Rohan Jeffs, appointed to REST by the Woolworths Board, has been with the fund since 1990. Geoff Williams, also from the SDA, has been a board member since 2008. And Duncan Shaw, appointed to the board by the Myer Holdings Board, joined the fund in 2010.