This update gives members insight into the portfolio changes happening at Club Plus Super.
2020 was an unprecedented year in investment markets, the economy and for Australian super funds.
What was our focus for the investments of our fund during 2020?
As is our usual process, we worked closely with our experienced asset consultant and some of the world’s best investment managers to manage our way through the extreme market volatility caused by COVID-19. We have been making investment decisions based on comprehensive research and a disciplined investment process.
We have also spent a lot of time and effort ensuring we could meet the needs of our members by paying out early release from super requests in a timely manner, whilst minimising any impact on our investment portfolios. We have paid out a total of $155 million to members since April 2020.
The outbreak of COVID-19 in early 2020 caused significant market volatility and has had huge impacts on the global economy. This has resulted in varying outcomes for investments in our portfolio.
Some of our investments such as infrastructure assets like airports and toll roads, and retail property assets such as shopping centres have really struggled because of the strict lockdown measures that restricted the mobility of the population and led to the temporary shutdown of many retailers.
Energy generation and distribution assets have been minimally impacted by the pandemic. While other assets that have flourished in these conditions, include industrial property assets like distribution and logistics centres, as they have facilitated the massive boom in on-line shopping amid the lockdown.
To further improve the diversification and resilience of our investment options and to increase their return potential, we made several changes over the last year. These included:
- adding Resolution Life, a global insurance related investment product, to the Growth Alternatives asset class
- swapping in a product managed by T Rowe Price in the international shares asset class to better capture investment opportunities in China as it becomes a bigger part of the investable universe
- adding the Ardea Real Outcome Fund to the Defensive Alternatives asset class to access unique and diversifying sources of return from global fixed interest.
We very much believe that environmental, social and governance factors can have a material impact on long‑term investment outcomes for members, and we know our members care about this.
Therefore, when we choose investment managers to manage members assets it is very important that they have a robust process for incorporating these considerations in their investment decisions. This ensures the investments we make via these managers not only deliver strong long-term returns for members but help protect or improve the welfare of the community and the environment. Some of the investment managers we use are global leaders in this area.
Recently, we further enhanced our responsible investments approach by:
- engaging with our investment managers on modern slavery
- monitoring the carbon intensity/footprint of our equity managers
- performing scenario analysis to estimate the potential impact of climate change on our member investment options.
We know our members, which includes me because my super is with Club Plus Super, care about how their money is invested, so be assured we will continue to have a responsible approach to the way we invest.
Finally, I would like to leave you with three key takeaways:
- We draw on some of the world’s best and smartest investment managers to manage our members’ money and we actively manage the types of investments we invest in based on strong research and a very disciplined investment process.
- Diversification is important to ensure that over the long term our member investment options can ride out all the bumps in the market, like we have seen in 2020.
- We believe in responsible investment because it helps build a better future for our members and the generations to come.
Hopefully, I have given you some insight into our investments focus during 2020. For further information, go to our investments section on the website and watch the latest investment market update.
Watch our investment update.
This portfolio update is from Gemma Dooley, Chief Investment Officer at Club Plus Super.
Investment performance is after investment fees and taxes, but before the deduction of administration fees. Investments can go up and down. Past performance is not necessarily indicative of future performance.