AustralianSuper’s Chief Investment Officer Mark Delaney looks ahead and shares his thoughts on what the economic recovery might look like.
In this video, Mark looks at:
- The Fund’s outlook on Australia’s economic recovery
- How economic recovery is expected to come in 2 stages
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Video: Investment Outlook
Speaker (00:05): As investors, we're always looking forward to understand how something happening today can affect investment markets in the future. To do this, we've monitored market signals closely every day. While we are optimistic with the medium and longer term outlook, the road to recovery is expected to remain a rocky one. With more volatility likely for share markets.
Speaker (00:29): The best indicator for the speed of our economic recovery is how quickly we can stop the spread of the COVID-19 virus and develop a vaccine. The main impacts of Australia's economic shutdown have been a large loss of revenue for many businesses and the rise of unemployment. Reopening the economy and supporting employment will be essential for the future economic growth.
Speaker (00:53): We expect two stages to the recovery with an initial burst of strong growth as the economy reopens, followed by a more subdued economic growth in the years ahead. This economic growth will help reduce the level of unemployment over time.
Speaker (01:08): Central banks and governments around the world are committed to supporting economic recoveries. In Australia, the Reserve Bank of Australia has lowered interest rates and the federal government has supported employment through the JobKeeper program.
Speaker (01:24): The financial support provided by governments has helped to offset the loss of household income in Australia and we've seen similar programs in other markets across the globe. While we currently don't know how long the economic uncertainty will last, we've seen markets rebound from downturns in the past, and we are investing in opportunities to provide favourable returns as the economy recovers. At AustralianSuper, we remain focused on delivering the very best possible retirement outcomes for our members.
For more information on AustralianSuper’s recent performance, you can also view:
- AustralianSuper’s performance for the year to 30 June 2020
- FY20 Performance drivers
- Managing investments in uncertain times
3 things to consider:
1. The short-term will be challenging
While the Fund remains optimistic for the medium and long-term economic outlook, investment markets are likely to see more volatility in the short-term.
2. Slowing down COVID-19 spread will drive economic recovery
The strongest indicator for a speedy economic recovery revolves around how quickly governments can halt the spread of, or fully eliminate, COVID-19. This means restrictions will be eased, which will support business and consumer confidence.
3. Economic recovery will come in 2 stages
As the economy reopens, we forecast an initial spike of strong growth. This will then plateau into slower and more subdued growth in the coming years. Unemployment is expected to stay high for some time.
Focus on the long-term
- Volatile markets can cause concern for members.
A long-term view of your super can help you stay focused on the end goal – the
best possible retirement outcome.
- Understand that market cycles are a normal part of long-term investing.
- The speed and shape of economic recovery is hard to predict. The strongest indicator for recovery revolves around how quickly a vaccine is discovered, helping eliminate the COVID-19 virus and enabling businesses to re-open.
If you’re looking for guidance on your super during market uncertainty, AustralianSuper has a team of accredited financial advisers who can provide advice for your financial circumstances and needs.
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.