Pension Investment Update
Investments | 11/05/2022 |
5 min read
The start of 2022 has been dominated by Geopolitical uncertainty with the ongoing conflict between Russia and Ukraine and inflationary pressures across energy and a broad range of commodities that saw inflation levels in the US reach the highest levels in 40 years. Rising cost of living, and COVID-19 have also continued to play their part as volatile markets impacted investment returns.
Overall, developed market shares delivered negative returns for the quarter. This had a knock-on effect to stocks that entered 2022 with significantly higher valuations than they would otherwise have had, making them particularly vulnerable to the volatility that was a hallmark of the quarter.
In contrast to most developed markets, the Australian share market provided positive returns over the quarter, of around 2.2%. This was driven by the materials and energy sectors which benefit most from the increase in commodity prices.
Against this backdrop, at Equip, we saw an increase in our Australian Shares investment option of 3.45% over the quarter and 17.8% over the past 12 months.
Our Balanced Growth investment option saw a decline of 1.8%, but as always, it’s important to think in the long term, and the option remains 7.6% up over the past 12 months.
Additionally, our Sustainable Responsible Investment option performed well over the quarter and was up 6.6%.
Read more in our Investment Report.
So, what now?
The path forward is looking increasingly clouded. Inflation, now at its highest levels in decades, is forcing central banks to push forward the timing and size of interest rate hikes this year. For example, at the time of writing markets are pricing a cash rate in the US of 2.7% by the end of 2022. Similar moves are expected in Australia.
Employment outcomes have been very strong here in Australia and through most of the developed world. With that, wages should begin to rise over the next year or so, which will be key for markets going forward.
Looking ahead, we maintain a cautious, but balanced view. Uncertainty prevails, which is why we will stick to our disciplined investment approach and will continue to focus on longer term strategies and outcomes.
It’s important to remember fluctuations are part of investing; small dips are to be expected and markets often rebound.
If you’re worried about market changes, we recommend you speak to one of our expert financial planners as they can help you navigate the best solutions for your super.
Chief Investment Officer
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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).