Investment strategy hits the right note with strong 2016-17 returns

9 Aug 2017 By Media Super Team

Despite a year of global political and economic uncertainty, Media Super’s investment strategy delivered strong returns for members. Investment returns for both our super and pension (default) Balanced options finished in the top 15 Australian super funds.*

The financial year began with investors finding their feet in a post-Brexit global economy. Australian super funds were affected short-term but losses were recovered in the following months, as the immediate-term impacts were predominantly confined to the UK.

Next the world prepared for the US presidential election in November 2016, not knowing quite what to expect. Election day saw volatile share markets; however taking their cue from Brexit, global equity markets went from strength to strength. Since then the US equity market has reached all-time highs. In December 2016, US interest rates were increased for the first time since the GFC, signalling economic growth and inflation.

The outcome of the French presidential election in May helped to stabilise the tone of European politics and, in turn, stabilised and strengthened European economic resolve. Theresa May’s snap-election in the UK in June didn’t work out too well for her party but fortunately the outcome had little impact on global markets.

YOUR INVESTMENT RETURNS

After comparatively low returns in 2015-16 across Australian super funds, we have achieved strong double-digit returns in the past financial year.

Our Balanced (MySuper) option – in which most members are invested – returned 11.53%^ for the financial year to 30 June 2017, well ahead of the median return of 10.53%.*

The pension Balanced investment option also continues to perform strongly, returning 12.49%^ for the financial year to 30 June 2017, also well ahead of the median return of 11.23%.**

Media Super’s Balanced (MySuper) option is well diversified across shares (Australian and international), property, infrastructure, fixed interest and cash investments, as well as various alternative investments, such as our R&D and Fulcrum film and television financing funds.

By investing in our Balanced (MySuper) investment option you also have added peace-of-mind knowing we have portfolio insurance in place, a mechanism designed to reduce the impact of losses if share markets fall heavily. We are one of the few funds that has this type of insurance in place.

Performance information is also available for other super and pension investment options.

THE YEAR AHEAD

The global economy continues to display positive economic signs, including higher growth and job creation, in both the US and Europe. Around the world central banks are focusing on increasing interest rates to a more ‘normal’ level. This should be viewed positively, as the extraordinary post-GFC measures are slowly and tentatively unwoundin the major economies.

Broadly speaking, economic growth is positive for asset prices, such as shares, property and infrastructure; although given strong price rises in 2016-17 there may be limited further upside. In an environment of continuing moderate economic growth, low interest rates and low inflation, we are not likely to see another year of double-digit returns.

In any event, superannuation funds are focused on long-term investment objectives and returns.  In Media Super’s case, the investment objective for the Balanced (MySuper) option is CPI + 3.5% over rolling 10-year periods.

Over the past three years we have worked to enhance our investment strategy and significantly improved our performance, in pursuit of that long-term goal.

WE’RE HERE TO HELP

Everybody’s investment needs are different and if you have questions about your investment options or would like help developing an investment strategy that best meets your needs and circumstances, speak to a Media Super Financial Planner.^^

You can arrange to speak to a financial planner by calling us on 1800 640 886.

 

^ Investment returns are not guaranteed and past performance gives no indication of future returns.

* SuperRatings Fund Crediting Rate Survey – SR50 Balanced options (60-76) Index, June 2017.

** SuperRatings Fund Crediting Rate Survey – SRP50 Balanced options (60-76) Index, June 2017.

^^ Media Super has engaged Industry Fund Services Limited (IFS) ABN 54 007 016 195 AFSL No 232514 to facilitate the provision of financial advice to members of Media Super. Advice is provided by one of our Financial Planners who are Representatives of IFS. Fees may apply. Further information about the cost of advice is set out in the relevant Financial Services Guide, a copy of which can be obtained by calling IFS on 1300 138 848. IFS is responsible for any personal advice given to you by its Representatives.