Chief Investment Officer Mark Delaney reviews AustralianSuper’s performance, from July - December 2019 and shares his view on what’s ahead for investment markets in 2020.
For the 2019 calendar year, returns across most investment options have been very strong with the Balanced option delivering return of just over 17%. Over the longer term, returns have also been strong. The Balanced option has returned 9% per annum to members over the past 10 years, which really doubles that amount of money over that time.
Investment update – see how the Fund has performed
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Those of you who don't know me, I'm Mark Delaney, the Chief Investment Officer at AustralianSuper. I'm here to provide you with a brief report on the Fund's investment performance.
For the 2019 calendar year, returns across most investment options have been very strong with the Balanced option delivering return of just over 17%. Over the longer term, returns have also been strong.
The Balanced option has returned 9% per annum to members over the past 10 years, which really doubles that amount of money over that time.
The Balanced option importantly continues to be a top performer when compared against other superannuation funds, ranking first over 10 and 15 years.
The performance of many investment options was boosted by the returns in share markets in the past year, which rose to finish at high levels by the end of the calendar year.
Balanced option for super (accumulation), SuperRatings top performing for the 10 and 15 years to 30 November 2019.
A combination of factors supported share markets during this period.
Firstly, there was agreement reached on US/China trade negotiations.
Secondly, there have been encouraging signs of recovery from economic data.
And thirdly, and probably the most important - policy makers are exhibiting a very low appetite for any material downturn and are providing monetary and fiscal policies to support economic activity.
The returns in the second half of the calendar year moderated somewhat, with the Balanced option delivering a return of 4.76%, and the Choice Income Balanced option delivering a return of 5.18%.
Over the past six months, investment markets have weathered the uncertainty of ongoing trade negotiations and low global growth.
Our investment outlook over the medium to longer term has been to start to reduce risk over time.
This is mainly because we've had a very long economic expansion, and a large run up in investment markets, which started in 2009 after the global financial crisis.
But in the shorter term, we're more constructive on the outlook as the trade negotiations between the US and China may continue to advance.
Central banks are likely to continue to support global growth with policies designed to increase economic activity, and interest rates are likely to remain low for a sustained period of time.
With the stabilization of economic conditions, we are cautiously optimistic about the continued growth in risk assets in the near term. But we remain prepared to reduce risk if our economic or market outlook deteriorates. We continue to invest in and look for assets such as infrastructure, property, and credit to provide some ballast against any shared market volatility.
Thank you for listening. I look forward to our next performance update in June.