Investment Performance Update, January - March 2020

Hi everyone, I’m Mark Delaney, Chief Investment Officer at AustralianSuper.

I’d like to share with you, how we’re responding to the unprecedented events of the past few months, to reduce the impact on your retirement savings and position your super for long-term growth.

It’s hard to believe that in early March, the World Health Organization declared COVID-19 a global pandemic. The speed with which this has affected the lives of everyone on the planet has been extraordinary. Understandably, the impacts of COVID-19 have brought about high levels of anxiety and uncertainly for members. But let me reassure you, the team at AustralianSuper are working hard to manage your savings for the long term.

What’s been happening in the US equity markets?

Interestingly, the US equity market, a good barometer for investing, is now back at levels it was at the start of 2019.

So as fast as the market moves have been in the past month, most of the long-term growth from shares has been maintained if you have been invested over that time.

How have unlisted assets been impacted?

In the interests of all members we’ve taken the prudent step of revaluing our unlisted asset portfolio to ensure that they reflect current market conditions and this has been incorporated in member balances.

The impact on unlisted assets has not been as large as with equities. The value of these investments did not rise as fast as equities over the past years. Consequently, the revaluation down should not need to be as large.

What has been the impact on the Balanced Investment option?

Members in the Balanced investment option experienced a decline of -6.45% for the financial year-to-date to end March 2020.

See chart at 1.41 minutes. Performance of Balanced option to 31 March 2020

Chart data disclaimer: Performance is for the period 31 March 2020 with the following disclaimer at the bottom of the screen where the chart appears: Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.

Members in the Choice Income Balanced option had returns of -7.19% for the same period. 

While short-term performance may be negative, I encourage you to do what we do. That is - to keep perspective and remain focussed on your objectives over the longer term.

The PreMixed Investment options are at or above where they were at the start of 2019, not that long ago. And over the long-term, the Balanced option has provided returns of 7.63% per annum over the last 10 years. That’s after tax and fees.

This is a cumulative return of 109% over the past decade. A very strong return for members.

What is supporting these returns?

The less volatile performance of the balanced plan is due to its portfolio diversification, which has cushioned the fall of share markets.

The Balanced option – where most members are invested – includes exposure to growth assets like shares and defensive assets like fixed income, foreign currency and cash, as well as unlisted assets such as infrastructure, property and credit, which provide both growth and income.

What’s the Fund’s liquidity position?

While navigating this market downturn, we’re focused on ensuring that there is sufficient liquidity within the portfolio, as well as and positioning the portfolio to meet the long-term objectives of building your retirement savings.

The investment options are generally well positioned for this environment with sufficient liquidity to handle all conditions.

What can you do?

While it can be distressing to see the impacts of volatility on your super balance, as much as possible, we encourage you to take a long-term view of your super.

If you have any concerns about your super, we encourage you to seek advice. We’re here to help. 

Visit our website to learn about the advice options available to you.

Most importantly, look after yourselves and your families in these uncertain times. Thank you.