What does a CPI+3% benchmark mean?
A target of inflation plus a margin - the fund aims to beat the cost of living by 3 percentage points a year over its stated horizon.
Two details decide what the number actually is:
- Which CPI - InvestHAQ uses the ABS Consumer Price Index series, stated on each fund profile
- How the margin is added - InvestHAQ uses the additive convention (CPI + 3). A geometric convention ((1+CPI) x 1.03 - 1) is also used in the market and gives a slightly higher target
An objective is not a promise. Most CPI-plus objectives are stated over rolling multi-year periods, and are frequently missed over shorter ones.
Factual and educational information only. Nothing on this page is financial product advice, a recommendation, or a Shariah ruling. Consider your circumstances and the product's disclosure documents, and seek licensed advice and qualified scholarly guidance before acting.