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In recent weeks, we have seen a rise in market volatility fuelled by events such as the Coronavirus and Saudi, Russian oil price tensions. Hear about what's driving this and how AustralianSuper is responding.
markets do not like uncertainty. What we are experiencing is not out of the
ordinary. Over any 20-year period, we might expect 4 to 5 years where
sharemarkets have a negative annual return. These periods of negative returns
often occur after markets have had very positive returns. For example, the US
stock market was up approximately 30% in the 2019 calendar year. And with the
recent events, markets are back to where they were in the early part of the
Coronavirus is having a similar impact to many other previous periods of
uncertainty. The key issue for financial markets is the spread of the virus and
the impact this spread has on the economy, due to restrictions on travel and
decreased activity and demand for goods/services. To a large extent, financial
markets have already priced a short, sharp downturn in economic activity.
Likewise, financial markets are also pricing a substantial policy response from
governments to support.
has been compounded in recent days by the oil price. Saudi Arabia in particular
has decided to maintain high levels of oil supply in face of decreased demand,
which has severely impacted the oil price and value of oil producing companies.
situation remains uncertain, and we continue to monitor the outlook, investment
markets and the portfolio.
has built a team of over 150 investment experts who are trained to manage
portfolios. Specifically, we do two things on members behalf
1. We build diversified investment
portfolios. This approach reduces the volatility that our members experience, so
that you can remain invested through market cycles. We do this by combining a
range of asset classes including shares, fixed income, cash, property,
infrastructure and foreign currency.
2. We monitor markets, economies and
indicators and adjust the Fund’s investments and the strategy of each
investment option to help maximize your retirement savings and manage risk.
past two years we have decreased the risk in each our diversified investment
portfolios, in part reflecting the strong returns from sharemarkets since the
crisis in 2008 until recently.
What you should consider?
suggests that staying invested in the market may provide better returns over
the long-term than trying to time the market. When trying to work out what’s right for you, it’s important to consider
your personal objectives, situation and needs.
If you have
been invested in our diversified investment options over time, you would be
aware that these portfolios have a history of strong long-term returns. For
example, based on past investment returns, every $1 invested the Balanced
option over the last 15 years, 1/1/2005 to 9/3/2020 is worth more than $3 now.
Recent events have had a small impact compared to the cumulative effect of
remaining invested over this period of time.
Investment returns are
not guaranteed. Past performance is not
a reliable indicator of future returns.
What’s happening in investment markets?
Read the latest articles from the investment team.