Solid investment returns continue through October
The festive season is fast approaching and while Australia is continuing to reopen, we are seeing several European countries considering the reintroduction of lockdowns as they head into the winter months. Despite the threat of lockdowns, financial markets remain resilient and are looking past these short-term concerns.
After falling in September, equity markets rebounded strongly in October but resources stocks were negative again as the iron ore price continued to fall from its previous high in July. Oil and gas prices continued to rise, which along with supply chain constraints, have contributed to increasing inflation over recent months.
The Reserve Bank of Australia continues to maintain its cash rate target of 10 basis points as they acknowledge the uncertainty in the bounce back in GDP growth and full employment. As the labour market begins to tighten, the RBA expects to see wage growth and inflation within its target 2 to 3 percent range. This positive outlook has seen the Australia 10-year bond rate rise to 1.8% from 0.9% twelve months ago.
In this environment, Media Super is continuing to achieve solid investment returns for our members.
While some months we may see short-term losses, it’s important to remember that superannuation is a long-term investment and over the medium and long term, Media Super’s Balanced options are continuing to perform strongly.
Your investment returns to 31 October 2021
Our Balanced (MySuper) option returned 2.37% for the financial year to 31 October 2021, above the median of 2.20% for Australian super funds.1
The pension Balanced option returned 2.60% for the financial year to 31 October 2021, also above the median of 2.35%.1
Over the medium and long-term, our Balanced option (MySuper and pension) is performing strongly, with returns above the median over seven and 10 years.1 Over the last five years, the Balanced option has been in the top quartile of Australian super funds.1
The Balanced option remains well diversified across a number of asset classes, including Australian and international shares, credit, property, infrastructure, fixed interest, foreign currency and cash, as well as various alternative investments, such as our Fulcrum film and TV financing fund.
As COVID-19 vaccination rollouts continue, the world appears to be shifting away from prolonged lockdowns to home-recovery programs, especially in countries with high vaccination rates. Supported by low interest rates, easy monetary policy and fiscal stimulus, financial markets have continued to increase despite many small businesses struggling as people continue to shop online and work from home. While the recovery in corporate earnings and household income continues, the potential exists for supportive fiscal and monetary policy to be wound back with a corresponding impact on valuations.
With a diversified portfolio of assets, Media Super is relatively well positioned for the period ahead. Recognising that there will be ups and downs along the way, we have reinstated the Balanced option’s portfolio protection, a mechanism designed to reduce the impact when share markets fall.
We’re here to help
If you have any questions about your investment returns or your investment options, our team is here to help. Give our friendly Helpline team a call on 1800 640 886 or lodge an enquiry through your online account.
Investment returns are not guaranteed and past performance gives no indication of future returns. Investment returns are net of investment fees and taxes.
1 SuperRatings Fund Crediting Rate Survey, October 2021 – Balanced options (60-76) Index and Pension Balanced options (60-76).