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Quarterly investment update

Performance at 31 December 2019

Welcome to the first investment update for 2020.

The 2019 calendar year was a good year for investors, with all asset classes (cash, fixed interest, property and shares) recording positive returns.  Australian shares, in particular, were up over 23% for the year.

Chief Investment Officer of Club Plus Super Gemma Dooley said that the performance of Australian and International shares contributed to the excellent returns for the fund over the past year: “I am very pleased to report that all of our investment options posted positive returns, with the MySuper option delivering 12.5% for our members in 2019”.


Accumulation graph

Pension graph
For more information on investment options and risk levels refer to the Investment Booklet.

Lower interest rates and higher returns

Around the world, the low interest rate environment saw investors seeking investments with a higher return.

The increased demand for these investments pushed prices higher, leading to strong returns but these may not be sustainable in the longer term. 

Apart from Australian and international shares, investments that performed well for the past 12 months included infrastructure assets such as airports and windfarms, private equity and property investments such as office buildings and industrial estates in prime locations.


But super is a marathon – not a sprint

The last decade has rewarded long term disciplined investors who have stayed the course despite all the short-term ups and downs in market returns. 

This is certainly the case for long-standing members of Club Plus Super who have benefited from the enduring investment strategy employed by the fund.

“The MySuper option continues to achieve its long-term return objective over 10 years, delivering 7.5% p.a for the 10 years ending 31 December 2019, ” confirmed the fund’s Chief Investment Officer Gemma Dooley.

The tables below reflect how each investment option has performed over the past 10 years for accumulation and pension accounts.


long-term returns
For more information on investment options and risk levels refer to the Investment Booklet.

Where to from here? 

Even though investment markets have continued to achieve new highs in January 2020, due to a recent easing in the US/China trade wars, Club Plus Super believes that the investment returns enjoyed over the last decade are unlikely to be repeated. This is because global growth is falling, corporate business earnings are weakening, interest rates are low, the value of many investments are stretched and we are in the late stage of the business cycle.

Business cycle graph
Reserve Bank of Australia (2020). The Business Cycle [PDF File]. Retrieved from rba.gov.au

Add to this the next phase of the US/China trade deal, the implementation of Brexit, an upcoming US presidential election, tensions in the Middle East and the global unease caused by Coronavirus.

In Australia, we also have to factor in the economic impacts of the recent devastating bushfires and ongoing drought.  It is clear that economic and market uncertainty are here to stay for the foreseeable future.


Diversify investments

So how can investors capitalise on their investment returns in an uncertain market?

“We believe the best way to deal with uncertainty is to ensure we have a resilient portfolio which is diversified across different types of investments across different regions.  We get specialist global investment managers to look after these investments and we manage the portfolio actively by making changes when appropriate,” says Club Plus Super’s Chief Investment Officer Gemma Dooley.

“For example, in November we have added an insurance‑related investment product to further diversify our investment portfolio and to provide some extra protection if adverse investment conditions eventuate. This diversification is what makes a difference to our investment returns over the longer term.”


Invest on your own terms

Club Plus Super has a diverse range of  investment options which are available to suit your different lifestage needs .

But before considering which investment option is right for you, you may need to seek professional financial advice.

If you would like more information about your investment options, please contact us so we can support you on your journey to retire on your own terms.

 

Important information about investment returns

Past performance is not a reliable indicator of future performance. Unless otherwise stated, returns are net of investment fees and taxes, except in the case of Club Plus Pension options, which are untaxed. The earnings applied to members’ accounts may differ. Investment returns are at the investment option level and are reflected in the unit prices for those options. Prior to 20 March 2017 annualised returns represented the annual crediting rates that were determined in August each year. Daily unit prices are available at clubplussuper.com.au/investments.