How has your super performed?
Superannuation | 8/07/2020 |
8 min read
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 amongst 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, Equip members in the Balanced Growth option received a 2.8% return, while the average super fund return was only 0.6%.
Equip comparison to May 31 2020*
5 Year P.A
10 Year P.A.
*SuperRatings SR50 Balanced Option Index
More broadly, members have enjoyed a decade of consistently strong returns. Notably, our Balanced Growth option has captured a top ten place for 15-year investment returns and provided members with an average of 8.1% per annum over 10 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.
^Superatings Balanced Growth Survey to May 2020.
This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr") is the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("Equip" or "The Fund"). Past performance is not an indication of future performance.
Togethr Financial Planning Pty Ltd (“TFP”) (ABN 84 124 491 078, AFSL 455010), trading as Equip Financial Planning, is licensed to provide financial planning services to retail and wholesale clients. TFP is owned by Togethr Holdings Pty Ltd (ABN 11 604 515 791). You can obtain the TFP Financial Services Guide and/or Privacy Statement by contacting our Helpline on 1800 682 626. This is general information only and does not take into account your personal objectives, financial situation or needs and therefore should not be taken as personal advice.