AustralianSuper’s Balanced option has delivered a return of 8.67% for the year and 10.72% per year for the 3 years to 30 June 2019. This marks the tenth consecutive year of positive returns for the Balanced option. All other AustralianSuper investment options also delivered positive results.
After a challenging start to the 18/19 financial year, a rebound in share markets in the last 6 months helped boost returns for members. More importantly, longer term returns over the 5 and 10 years remain consistently strong.
AustralianSuper’s Balanced option was the top performing fund over 10 and 15 years to 30 June 2019 in the SuperRatings survey. It also outperformed the median option and was placed in the top four funds over all time periods to 30 June 20192.
Balanced option returns to 30 June 2019
|Super members||Choice Income members|
|1 year (%)||8.67%||9.47%|
|3 years (% pa)||10.72%||11.68%|
|5 years (% pa)||9.48%||10.43%|
|10 years (% pa)||9.76%||10.90%|
10 years of positive returns
Chief Investment Officer, Mark Delaney, said ‘AustralianSuper members have now seen 10 years of strong returns which represents a major boost to their retirement savings.’
‘If you had $50,000 invested in the Balanced option from July 2009, your retirement savings would have more than doubled over the last 10 years and would now be worth $126,921.^ Based on investment returns which are net of investment fees, costs and taxes, but do not include the impact of administration fees and insurance premiums that are deducted from members' account balances.
A tough year that favoured a diversified strategy
The financial year was a story of two halves, with underlying global political and economic uncertainty creating a complex investing environment.
‘There were some tough months during the year and at times it looked like we would see relatively subdued returns,’ Mr Delaney said. ‘However, there was resilience in infrastructure and property markets while falling interest rates also meant fixed interest did well.’
Australian and international shares had a strong finish to the financial year, with the lower Australian dollar helping to boost returns on international assets.
We’ve been saying for a while that members need to be prepared for the end of the economic growth cycle we’ve enjoyed over the last 10 years. AustralianSuper is closely monitoring the risks of an economic downturn, and the actions central banks and governments are taking to manage those risks.
The good news this year is the commitment by the US Federal Reserve and the RBA to support economic growth through lower interest rates.
Staying focused on long-term performance
The important thing is not to panic when you see markets fluctuate, and to stay invested.
'Most members are usually better off sticking with their long-term strategy, providing it is right for their goals and circumstances,’ said Mr Delaney.
For example, falls in Australian and international share markets resulted in a negative return of 2.7% for the Balanced option in the last 6 months of 2018. Markets then rebounded in in the first half of 2019 and the Balanced option returned 11.7% for the second half of the financial year. Members who switched investment options in the first half of the financial year would have locked in that loss and missed out on the strong growth that followed.
While we may experience times where returns are lower or even negative, we expect it and plan for ways to minimise the impact of it. For example, late last year we increased the weighting to more defensive assets like fixed interest in our PreMixed options. Holding unlisted assets like infrastructure has also helped to protect members’ returns from the impact of volatility, and has also contributed to our strong long-term performance.
We stay focused on what’s going to make the biggest difference to your retirement savings, and that’s long-term net performance.Find out more: AustralianSuper’s performance