Investment update - Record returns in milestone year

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

Balanced option - financial year returns

The bar chart shows the financial year percentage returns of the Super and TTR Income Balanced option from 1987 through to 2021. The financial year ending 30 June 2021 saw a record 20.43% return for the Super and TTR Income Balanced option. 
Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns. Returns from equivalent options of the ARF and STA super funds are used in calculating return for periods that begin before 1 July 2006.

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# 
The graph shows the dollar growth of an initial investment of $50,000 in the Super and TTR Income Balanced option across 15 years to $147,859 as of 30 June 2021. 

# 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
The pie chart shows the 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.

 

WATCH OUR LATEST INVESTMENT UPDATE WEBINAR

 

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

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, situation or needs.  Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898. 



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