March investment update5 May 2020
Financial markets fell sharply in March as COVID-19 evolved into a global pandemic. Globally, governments and central banks adjusted monetary and fiscal policies, and governments released stimulus packages to help lessen the financial impact of the pandemic on individuals, businesses and the economy more broadly.
Many people are concerned about the impact on their super and pension savings. We understand your concerns and our teams across the fund are working to support our members through these uncertain times.
While Media Super was not immune to losses, our Balanced option is in a relatively better position than many other super funds, with smaller short-term losses than the median loss2 for the financial year to 31 March. Members will see short-term reductions in their account balances but it’s important to remember that superannuation is a long-term investment.
We are actively monitoring the situation and on the lookout for strong opportunities on a risk-adjusted basis. For instance, Media Super invested in a range of listed securities, such as stocks and bonds, at depressed prices during the month of March. As financial markets change, we may adjust the asset mix in our options accordingly, but our focus will remain on trying to exceed the long-term investment objectives of each option.
Your March investment returns
The Balanced (MySuper) option recorded -8.68%1 for March 2020, and -5.56%1 for the financial year to 31 March 2020.
The pension Balanced option recorded -9.57%1 for March and -6.21%1 for the financial year (to 31 March 2020).
It’s important to note that longer term returns are still solid and meeting long-term investment objectives, with the Balanced (MySuper) option returning 5.20%1 over five years and 6.64%1 over 10 years, and the pension Balanced option returning 5.81%1 over five years and 7.47%1 over 10 years.
If you’re invested in one of our higher growth options – such as Growth, High Growth, Australian Shares or Overseas Shares – you will see larger short-term reductions in your account balance than for those invested in the Balanced option. These options carry higher investment risk and are generally more volatile than our other pre-mixed options, which is why they have also delivered relatively higher returns over the past 10 years.
Considering an investment switch? Make an informed decision
We understand that losses can be concerning, especially if you’re retired or nearing retirement.
We’ve observed that some members switch into defensive options during times of uncertainty because they’re nervous about losses. Unfortunately, this is often the wrong time to switch, as it crystallises and locks in losses, and can lead to lower account balances in the long term. This is because members often don’t switch back into less defensive options when uncertainty subsides, and miss out on gains when financial markets rebound.
If you’re considering switching investment options, take the time to fully understand all options available to you and the potential impact of switching now.
You can find information about our full range of investment options in the Investment Guide and Pension Guide.
And it’s a good idea to speak to our team before making a switch, so you can talk through your concerns and fully understand the options available and associated risk.
Investing for the long term
Media Super’s Balanced options (MySuper and pension) are well diversified across a number of asset classes, including global shares, property, infrastructure, fixed interest, foreign currency and cash, as well as various alternative investments, such as our Fulcrum film and television financing fund.
Our Balanced option also has a degree of ‘portfolio protection’ in place, a mechanism designed to reduce the impact of falling share markets. We are one of the few superannuation funds that has this type of protection in place. It does not fully offset the impact of market falls, but does reduce their impact.
Given ongoing global uncertainty due to the pandemic and the impact this is continuing to have on financial markets, we may see negative returns for the financial year to 30 June.
As financial markets move in cycles, we will work with our investment managers and advisors to identify opportunities that will inevitably arise. We will continue to prudently manage your super and pension savings and work to exceed our investment options’ long-term investment objectives.
We’re here to help
We will continue to provide regular updates as the situation evolves and changes – please check this blog for the latest news on your super and pension savings.
If you have any questions or concerns about your investment options, or you’re considering making an investment switch, please call the Helpline on 1800 640 886.
1 Investment returns are not guaranteed and past performance gives no indication of future returns.
2 SuperRatings Fund Crediting Rate Survey – SR50 Balanced options (60-76) Index & SRP50 Balanced options (60-76), March 2020