AustralianSuper’s investment performance for the year to 30 June 2020

We take a look at the 2020 financial year and the returns earned for members in the Balanced investment option, and Choice Income Balanced option, which both ended the year with a positive result.

AustralianSuper’s Balanced investment option has delivered return of 0.52% for the year, 8.77% per annum for 10 years and 7.24% per annum for 20 years to 30 June 2020. For members in the Choice Income Balanced option, the return was 0.55% for the year and 9.71% per annum over 10 years1.

The Balanced option was the top performing super fund over 5, 10 and 15 years to 30 June 2020 in the SuperRatings survey2. It also outperformed the median option which was -0.82%.

It was a year of 3 phases. Initially with strong returns in the first part of the year, followed by an extraordinary health and economic crisis then a partial market rebound during the last few months of the year.

Despite the small positive return this year, the longer term returns over 5 and 10 years remain strong.

 

Balanced option returns to 30 June 2020

  Super/TTR Members Choice Income Members
1 year (%) 0.52% 0.55%
5 years (% pa) 7.35% 7.95%
10 years (% pa) 8.77% 9.71%
20 years (% pa) 7.24%  

 

Another year of positive returns (just) 

‘To arrive at the end of the financial year with a positive result, given the turmoil we’ve seen, is a very good outcome for members,’ said Mark Delaney, Deputy Chief Executive and Chief Investment Officer.

‘Over the longer term, members who invested $50,000 20 years ago in the Balanced option would have seen their retirement savings grow to be worth $202,6083.

‘To arrive at the end of the financial year with a positive result, given the turmoil we’ve seen, is a very good outcome for members.'
Investment performance update

 

AustralianSuper Balanced option returns
Financial Year annual Returns
2020 0.52%
2019 8.67%
2018 11.06%
2017 12.44%
2018 11.06%
2017 12.44%
2016  4.54% 
2015  10.86% 
2014 13.88% 
2013 15.63% 
2012 0.98% 
2011 10.27% 
Source: AustralianSuper data

 

SEE MORE: AUSTRALIANSUPER’S PERFORMANCE

 

Positive returns despite market volatility

The impact of the COVID-19 (Coronavirus) pandemic and the measures taken by governments around the world to manage it has proved extremely challenging for all economies including Australia’s – devastating some industries and leaving many experiencing a huge downturn in trade and revenue.

Investment markets have reacted to the uncertainty, with sharemarkets in particular experiencing increased volatility. During the March quarter we saw the Australian share market fall 23.4% (between the peak on 20 February to the trough on 23 March it fell 36.2%) and then recover 16.8% in the quarter ending 30 June.

The AustralianSuper investment team have continued to focus on 2 key things, which has positioned the investment portfolio well during this uncertainty and for the continued long term growth of members’ savings.

  1. We build diversified investment option portfolios. This approach reduces the volatility that members experience, so that you can remain invested through market cycles. The diversification in the Balanced investment option has helped cushion returns despite the sharemarket volatility, and will ensure members benefit from any recovery of the sharemarket and broader economy

  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.

 

Long-term investment and long-term rewards

It’s important to remember that your super is a long-term investment, even for most people in retirement. And while changes in your balance can be a worry, if we look at markets over the long term we can see that fluctuations are expected.

Investment markets move in complex cycles and can be a challenge to predict and respond to. But AustralianSuper data shows that if you make decisions based on short-term considerations, you could be worse off in the long run. This includes activities like switching investment options or withdrawing super early, which can both have a significant impact on how much super you’ll have when you retire.

For example – if a member decided to switch from the Balanced option to Cash on 18 March 2020 (after the government announced steps to restrict movements because of COVID-19) and then didn’t switch back, that member would have a return of minus 7.09% for the financial year (as of 30 June, 2020). If they hadn’t made a change, they would have received the Balanced option’s return of 0.52%.

‘I think the biggest thing for the year was really about holding your nerve,’ Mark Delaney. ‘Trying to time the market does not fit with a long-term investment strategy.’

READ MORE: POTENTIAL RISKS OF SWITCHING INVESTMENT OPTIONS

 

If you’re considering making a change or looking at investment options talk to an adviser to ensure you’re making the right choice for your personal goals.

 

Active investment management to protect your savings 

Our 170 investment experts are focused on maximising your savings and managing risk. They are actively monitoring the outlook and looking for investment opportunities that become available after periods of downturn. All their investment decisions aim to deliver the best possible long-term returns, to help members achieve their best possible retirement outcomes.

‘We have a very experienced team who actively manage members’ investments. They closely monitor markets and economic indicators and make sure the portfolios are diversified to reduce volatility,’ says Delaney.

 

HOW AUSTRALIANSUPER INVESTS

 

Economic recovery will take time

We understand economic recovery will take time and there will be ups and downs.

‘We're moderately optimistic at the outlook for the next 2 or 3 years, particularly the further you look out,’ says Delaney. ‘In the short term there’s lots of issues, but if you look out further, you're starting with economies at the bottom of the cycle, attractive valuations, and policymakers inclined to support initiatives to keep the economies going.’

While we continue to diversify investment across many countries, AustralianSuper has always been a large investor in Australia. We currently invest almost $90 billion of members’ super in Australia. These investments include Australian companies and assets, such as essential infrastructure, like ports, roads and electricity networks, and commercial property. We also invest in bonds issued by Australian governments and large companies and we lend directly to Australian companies and projects.

These investments contribute to strong, long-term returns for members, as well as the Australian economy, and support the employment of tens of thousands of Australian workers.

‘A strong economy is good for member returns, and we will continue to invest in Australian companies and assets that make good investment sense and help underpin Australia’s future economic growth and job creation.

We understand how challenging these times are for our members. We will continue to work on your behalf to navigate those challenges, and we are dedicated to maximising your retirement savings. Today, tomorrow and every day.’ Delaney said.

 

If you have any concerns or questions, want advice or just want to know how your super is working for you, please contact the AustralianSuper team. To view your balance log in to your online account, or download the free AustralianSuper app.

Sources:

  1. 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
  2. SuperRatings Fund Crediting Rate Survey, SR50 Balanced (60-76) Index 30 June 2020.
  3. 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.

Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.

This information may be general financial advice which doesn’t take into account your personal objectives, situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement available at australiansuper.com/pds. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.

Compare us

Choosing the right fund could mean more money in the future, giving you more confidence in your long-term retirement plan performance.

compare us
Back to top