How has your super performed?
2020 has turned long held assumptions about the global economy on their head.
The coronavirus pandemic has grounded international travel, seen record unemployment and taken investment markets on a wild rollercoaster ride.
But even among the economic uncertainty and the very real hardships that people are facing, we’ve also seen communities come together and hopes for a brighter future. As we close out the financial year and hit the midpoint on 2020 it’s time to take stock and analyse the impact on members’ super balances.
The lay of the land
Markets fell significantly and very quickly as the coronavirus pandemic hit global markets back in March. Despite the initial panic, we’ve seen significant rebounds since then. While markets are still a bit lower than their record highs in February, they’re back to late 2019 numbers.
Encouragingly, April and May saw market sentiment around the world improve as the public lockdowns implemented in most countries helped flatten the curve and slow the virus spread.
Another key factor has been the size of stimulus put in place by Governments and Central Banks to support economies and markets around the globe. These short-term measures have helped brace the economy and the job market. In Australia the Job Keeper and Job Seeker programs have provided significant support, while banks have provided a temporary mortgage amnesty for many families.
We’re still in uncharted waters as far as the virus and economic fallout are concerned, but Australia has been fortunate enough to withstand the immediate financial crunch. This has influenced investor sentiment, which in turn has impacted retirement savings.
What’s happening with my retirement savings?
The fund’s investment team has been watching the markets closely and adjusting investment strategies as conditions change. Market volatility has produced some excellent longer-term opportunities which we have taken advantage of.
At the same time, our rolling one year returns to 31 May 2020 paint a clear picture. In what has been one of the most turbulent years in living memory, Catholic Super members in the Balanced option received a 1.8% return, while the average super fund return was only 0.6%.
Catholic Super comparison to May 2020*
More broadly, members have enjoyed top quartile returns over the past 5, 10 and 15 years. Notably, our Balanced (MySuper) option has returned 7.9% over the past ten years.^
Can we expect a ‘V’ shaped recovery?
No one can forecast what’s around the corner. The good news is we have seen some success in slowing the spread of the virus.
This has driven expectations around the easing of restrictions and an increased optimism for an economic recovery. When combined with the trillions of dollars in stimulus that governments have pumped into economies, we’ve seen equity markets defy expectations and rebound far quicker than many anticipated.
As for how long it will take to come out of this crisis and whether it will be a ‘V’ shaped recovery or more of a ‘U’ shaped market pickup that remains to be seen.
But we are doing all we can to ride through these adverse market movements and to make sure that your retirement savings are poised for long-term growth as markets and economies recover from the pandemic.
You can review our latest investment returns online. The end of financial year numbers are due in a couple of weeks.
While there are a host of global challenges to face in the coming months and years, Australia’s investment markets have handled the immediate impact of coronavirus with resilience. How the next 12 months plays out remains to be seen. We'll keep you updated.
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Any figures quoted are correct at the time of writing but may be subject to change.
Authorised by Togethr Trustees Pty Ltd (ABN 64 006 964 049; AFSL 246383) ('Trustee') the trustee of the Equipsuper Superannuation Fund (ABN 33 813 823 017). Catholic Super is a division of the Equipsuper Superannuation Fund (ABN 33 813 823 017). Financial advice services may be provided to members by the trustee's related entity.
Togethr Financial Planning Pty Ltd (ABN 84 124 491 078; AFSL 455010). The information contained herein is general information only. It has been prepared without taking into account your personal investment objectives, financial situation, or needs. It is not intended to be, and should not be, construed in any way as investment, legal or financial advice. Please consider your personal position, objectives, and requirements before taking any action. Past performance is not a reliable indicator of future performance.
© 2020 Togethr Trustees Pty Ltd. For further information please our contact our Service Centre on 1300 655 002 or visit our website: csf.com.au.