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Pension Investment Update

Superannuation  |  9/02/2022  |   7 min read

Despite the uncertainty of 2021, the last 12 months have seen a share market boom. This is reflected in strong investment returns, which have helped push up super balances.  

Equip’s (Pension) Balanced Growth option was up 2.5% for the previous quarter (to 31 December 2021). This took one-year returns to over 13%. 

But the highlight was our Property option, which returned 8% for the quarter, and 22% for the previous 12 months. That’s a return of approximately $22,000 on a $100,000 super balance*. 

Overall, markets have rebounded sharply since COVID caused a plunge in early 2020. The Australian ASX is up over 50% in the previous 18 months. This sharp jump has made up for any initial losses and then some. It’s been fueled by successive rounds of fiscal stimulus and very low interest rates, which have enabled investors to look beyond the rolling lockdowns, supply shortages, and travel restrictions.  

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Where to from here? 

Will the strong investment returns continue? The slowdown of financial markets at the start of the year and growing alarm about inflation suggests the gains may have already been made.  

Following the initial COVID panic in March 2020 the playbook for global markets has been relatively straightforward. Very low interest rates + fiscal stimulus = stock market gains.  

In other words, the global economy has been awash with cheap money as governments have attempted to contain the greatest economic contraction we’ve seen since the Great Depression.  

But two years on, the picture has changed. Vaccines have enabled a partial reopening and people have started to spend some of the money they squirrelled away during the height of the pandemic. 

This has been tempered by supply chain problems, volatile employment markets, and a business sector that’s hesitant to invest while things remain up in the air. 

Meanwhile, inflation has been creeping up, fueled by all that cheap money. In the U.S. this has seen inflation numbers hit their highest rate since 1981 and the Reagan presidency. 

The challenge for governments over the next 12 months will be navigating the global uncertainty while trying to balance growth and spending. That’s a tall order, and its success will be reflected in share prices.   

Meanwhile, there’s the small matter of a federal election here in Australia. 

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*Less fees

Issued by Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr"), the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("the Fund"). 
The information contained herein is general information only and does not take into account your personal financial situation or needs. You should consider whether this information is appropriate to your personal circumstances before acting on it and, if necessary, you should also seek professional financial advice tailored to your personal circumstances. Where tax information is included, you should consider obtaining personal taxation advice. 
Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the appropriate Product Disclosure Statement (PDS) and Target Market Determination for the product which are available at equipsuper.com.au  
Past performance is not an indication of future performance.
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). 

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