Investments

Happy New Year and welcome to the latest performance update.

The first half of the financial year has been strong. Over the 6 months to 31 December 2024, members in the Balanced option earned 5.47% return in the super accumulation option and 6.06% in the Choice Income retirement accounts.

This brought the 10-year return for members in the Balanced option to 8.11% in super, and 8.87% in Choice Income, at the end of December.

Strong investment performance for the past 6 months continues to be driven mainly by listed sharemarkets, particularly international equities.

This outperformance was mainly led by the large US technology stocks, along with the strengthening of the US dollar.

Overall, the international share market returned 14% and the Australian share market returned around 7% in the 6 months to 31 December 2024.

This performance was despite the uncertainties of the US election, potential US policy changes and mixed central bank activity.

This continued the growth we've seen in listed equities over the past 2 years.

Other asset classes such as private equity, infrastructure and credit had positive but more moderate returns.

Looking forward we're expecting global economies, particularly the US, to continue growing at a healthy pace in 2025 thanks to technology developments like AI, strong employment and a potential lift to consumer sentiment.

The Trump presidency in the US could have implications for investment markets, and we are watching them closely.

New policies may impact global trade and the geopolitical landscape, bringing volatility to markets over the coming year.

More broadly, we'll continue to closely monitor markets and make the necessary adjustments to your portfolio to take advantage of investment opportunities and manage risk to support member returns.

Our absolute performance has been strong. However, our relative performance has not been as strong.

It's been a challenging environment for our active managers, as only a very small number of stocks have driven performance.

We expect this to resolve as US equity market performance broadens beyond these big tech stocks.

In the meantime, we have taken a number of actions to improve investment outcomes for members, including increasing the Balanced option’s exposure to growth assets like listed shares and repositioning the international equities portfolio.

We also continue to invest in unlisted assets to provide strong long-term returns.

Two recent infrastructure examples are Australian housing developer Assemble and US data centre platform DataBank.

Through Assemble, we have invested in a redevelopment that will deliver more than 800 apartments in Melbourne. It's a great example of how members’ money can help bolster Australia's housing supply, while delivering long-term returns for members.

As for DataBank, we plan to invest $2.2 billion Australian Dollars in this leading US data centre provider.

It's an investment that further diversifies our exposure to digital infrastructure, a sector we believe will deliver long-term performance for members.

As always, we're keen to share more about AustralianSuper’s investments, strategy and performance.

For the latest information, visit our website. Thank you.