23 July 2021
As the Fund celebrates its 15th birthday, members are also celebrating record returns for the 2021 financial year.
It’s been an extraordinary year for members with the Balanced option returning a historic 20.43%* in accumulation. This is the best financial year return for the option since it started in August 1985. Members with Choice Income accounts have welcomed even stronger returns in the Balanced option, with a 22.30%* return for the 2021 financial year. In the video below AustralianSuper’s Head of Total Portfolio Management, Alistair Barker, runs through the Fund’s latest investment results.
Investment update for the 2021 financial year
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Show Transcript
Hi everyone and welcome to our latest performance update.
The past twelve months have been extraordinary for many reasons, but most importantly for members, the Balanced option has delivered exceptional returns - 20.43% in Accumulation and 22.30% in Choice Income accounts.
This means a significant boost to member balances.
From the 1st of July 2020 to the 30th of June 2021, investment markets rebounded from the impacts of COVID-19.
Governments and central banks all around the world, responded to the pandemic with extraordinary fiscal and monetary programs to support their economies.
These programs, along with the global roll-out of vaccines, helped to revive consumer and business confidence, providing an extraordinary boost to investment markets – especially for Australian and international shares.
In the past year, Australian shares have risen over 27%, led by consumer spending on discretionary items, and the financial sector as well as some technology companies.
International shares also delivered returns of over 27% in Australian dollar terms, with similar returns from both developed and emerging markets.
Once again, these results highlight that investment markets recover after downturns. This is why it’s so important for members to see super as a long-term investment, and to seek advice before making changes when markets are volatile.
The AustralianSuper investment portfolio is diversified across several asset classes and our performance and returns have been broad, coming across most areas of the portfolio.
The returns from listed shares and private equity helped to deliver the outstanding performance of the Balanced option. Listed equities performed over 27% for the year and the private equity portfolio returned over 30% for the year.
Our investments in mid risk asset classes like infrastructure and credit also contributed with returns over 10% for the year.
Fixed interest assets also played their role, providing portfolio stability, while also outperforming their benchmarks.
These assets all contributed to the phenomenal 20.43% return on the Balanced option.
This result is especially significant for members. It’s the best financial year return for the Balanced option since it started in August 1985, almost 36 years ago.
We are so proud to deliver such strong and consistent returns for AustralianSuper members. The Balanced option continues to be a top performing fund.
At the end of June this year, the 15-year performance of the Balanced option was 7.49% per annum after tax.
This means that $50,000 invested 15 years ago would now be worth $147,859 - nearly triple the initial balance 15 years ago.
These results highlight the importance of experience in navigating volatile markets. The Fund’s expertise in investing through market cycles helps protect and grow member balances.
So … where to from here - for the economy and investment markets?
As we look to the longer term, investment markets are expected to move out of the current growth cycle.
To explain what this means, we’ve assembled specialists from across the Fund, including our Global Economist Mark Tierney, in our latest Investment Update webinar. You can view the webinar free of charge on our website.
Thank you for joining us today.
As always, if you have any questions, please call or email us. Or find us at AustralianSuper.com.
End Transcript
Balanced option - financial year returns
Despite the uncertainty and disruption caused by COVID-19, economies around the world have staged a remarkable recovery. Governments and central banks responded quickly to the pandemic with significant fiscal and monetary stimulus, including record low interest rates. These measures, along with vaccine roll-outs, have helped restore consumer and business confidence and drive investment markets to record levels.
Rising investment markets have fuelled the impressive returns in the Balanced option. Returns in this option have come from most areas of the portfolio including:
- Australian and international shares returning over 27%* for the year
- Private equity returning over 30%*
- Investments in mid-risk assets like infrastructure and credit have also contributed with returns over 10%* for the year
- Fixed interest assets have also played their role, providing portfolio stability, while also outperforming their benchmarks
While it’s important to appreciate the outstanding returns of the past year, when it comes to super, it’s important to appreciate consistent, long-term performance. In this milestone year, we are proud that the Balanced option continues to be a top performing fund. At the end of June 2021, AustralianSuper’s Balanced option ranked number 1 over 7, 10, 15 and 20 years in the June 2021 SuperRatings Fund Crediting Rate survey.
At the end of June 2021, the 15-year performance of the Balanced option was 7.49%* per annum. With this performance, $50,000 invested 15 years ago is now worth $147,859# - nearly triple the initial balance.
Balanced option: Growth of $50,000 over 15 years#
# Based on crediting rate returns over 15 years and isn't adjusted for administration, insurance and other fees and costs that are deducted from account balances.'
AustralianSuper’s outlook and portfolio changes
So where to from here for investment markets? Investment markets are always moving. They move in cycles, creating the ups and downs that we see over time. This is why it’s so important to keep a long-term view when it comes to your super.
LEARN MORE: UNDERSTANDING INVESTMENT MARKET CYCLES
In the short term, economic conditions are looking positive – thanks to increasing vaccination rates, the lifting of pandemic restrictions and continued fiscal and economic stimulus.
To take advantage of these conditions, we have positioned the Balanced option for growth, with high allocations to Australian and international shares, plus a greater exposure to private equity.
Within Mid Risk assets, we have a higher relative allocation to infrastructure and a reduced allocation to property investments, in line with the expected returns for these asset classes.
The portfolio has a reduced weight to foreign currency, based on the relative value of the Australian dollar and commodity prices.
The Balanced option is positioned for growth, with high allocations to Australian and international shares, plus a greater exposure to private equity.
Balanced option Asset Allocation as at 30 June
2021
Please note: The Trustee may alter the asset allocation or the composition of individual asset classes from time to time to suit prevailing market circumstances. Due to the Fund’s different cashflow management approaches for Superannuation and Choice Income accounts, there may be a slight difference in the asset allocations for these options at any given time.
Focusing on the long term
As we look to the longer term, investment markets are expected to move out of the current growth cycle. While this may mean more moderate returns compared to the past year, the investments team has a strong track record of managing members’ retirement savings through all market cycles.
To learn more about our outlook for investment markets and the economy, watch our latest investment webinar. Specialists from across the Fund, including Global Economist – Mark Tierney, share their views on what members can expect in the year ahead.
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This information has been prepared in July 2021 and is subject to change.
This information may be general financial advice which doesn’t take into account your personal objectives, financial 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. or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/tmd. AustralianSuper Pty Ltd, ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.
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