Valuation of my fund - unit prices vs 'investment earnings'

Hi All,

So checking my REST super fund on the weekend, I see on the 30th June, there is a line item 'Investment earnings' with a substantial negative $ amount.

REST funds use daily adjusted unit pricing.

I don't get it:

Each time I make a contribution, I buy 'units' of the fund (and the price goes up and down each day).
So over time, my balance is changed by the amount I put it, any charges taken out, and the unit price.

But unless I sell the units, I don't see why I get 'investment earnings or losses' capitalised... and why REST would have any reason to deduct them at the end of the FY?

Any ideas as to whats going on with that?

 

Revaluation of unrealised value?
Investment loss?
Idk..ask the fund if you dont understand

 

Thanks, I did ask the fund, they were not exactly full of knowledge about it...

But I think what we came to was... that it's the end of Financial Year statement of profit/loss on the account...not an actual transaction of cash....

ie. during the FY, your investments were +/- this $ amount.... but as long as you didn't sell, you haven't realised this loss and the value may recover going forward.

 

Earnings can include unrealised change in value of investments noted as revalued to present market. Super Law requires all investments be valued at market rates where accounting convention typically records cost - Too misleading for members since it would show what you put in not what its worth. The P&L for the fund can show unrealised gains and unrealised losses which are "shared" with members. So in a years financials it will shows the annual changed values of all the portfolio. BUT... Your investmnet choice may only be a part of that eg You have growth assets, others may have capital stable or cash assets. The fund financials shows ALL the fund where your specific interests (eg growth) can vary from the average. ItS an accounting thing and it is intended to reflect what could have been your member balance IF you were to take the benefits at 30 June

Important to consider the present valuation of fund and this is often reflected in daily / weekly unitised pricing. Compare 30/6 with today to get a feel for the notional change in the quarter and benchmark that against say ASX / Cash rates etc to get some ideal of investmnet performance. remember short term is like a roller coaster where longer term is more like a long gentle incline (hopefully!)