22 October 2024
AustralianSuper members benefitted as rising markets provided a boost for investment returns. All PreMixed and DIY Mix investment options delivered positive investment performance during the September 2024 quarter.
The Balanced option, where most members are invested, returned 3.07% for Super accounts and 3.45% for Choice Income (pension) accounts, for the three months ending 30 September 2024.
AustralianSuper’s Chief Investment Officer Mark Delaney explained, “Members will be pleased to see another quarter of positive investment returns. The high-interest rate regime of the past two years is slowly changing, and there’s a lot happening to keep the investment team busy. However, as always with super, it’s important to stay focused on the long term.”
September 2024 quarterly investment performance
Despite some volatility during the quarter, most asset classes delivered positive returns in the three months ending 30 September 2024.
Listed shares were the largest contributor to the Fund’s positive performance during the quarter. Australian shares led the way, boosted by a rebound in the materials sector, with additional contributions coming from the industrials, financials and consumer discretionary sectors.
Private market assets added steady returns, led by unlisted infrastructure and private equity. Fixed interest experienced a particularly strong quarter and cash contributed modestly.
After another positive quarter, AustralianSuper remains one of the top performing super funds over the long term. The Balanced option ranks #2 over the last 15 and 20 years for investment performance1.
Super and TTR Income investment option performance as at 30 September 2024
| INVESTMENT OPTION | 3 Months | 1 Year | 3 Years p.a. | 5 Years p.a. | 10 Years p.a. | 15 Years p.a. | 20 Years p.a. |
|---|---|---|---|---|---|---|---|
| PreMixed Options | |||||||
| High Growth | 3.24% | 13.88% | 5.88% | 8.08% | 9.12% | 9.08% | 8.31% |
| Balanced | 3.07% | 11.91% | 4.97% | 6.85% | 8.19% | 8.35% | 7.91% |
| Socially Aware | 3.41% | 12.81% | 4.43% | 5.94% | 7.28% | 7.80% | 7.29% |
| Indexed Diversified | 4.10% | 16.46% | 6.19% | 7.33% | 7.53% | ||
| Conservative Balanced | 2.81% | 9.62% | 3.49% | 4.94% | 6.38% | 7.01% | |
| Stable | 2.45% | 7.36% | 2.35% | 3.23% | 4.83% | 5.61% | 5.68% |
| DIY Mix Options | |||||||
| Australian Shares | 6.93% | 19.58% | 9.88% | 9.73% | 10.01% | 9.20% | 9.41% |
| International Shares | 0.86% | 18.94% | 6.08% | 10.79% | 11.32% | 10.70% | 8.36% |
| Diversified Fixed Interest | 2.07% | 4.79% | -0.04% | 0.49% | 2.34% | 4.26% | 4.37% |
| Cash | 1.07% | 4.13% | 2.60% | 1.74% | 1.89% | 2.47% | 3.17% |
AustralianSuper investment returns are based on crediting rates, which are returns less investment fees and costs, transaction costs, the percentage-based administration fee deducted from returns from 1 April 2020 to 2 September 2022 and taxes. Past performance isn’t a reliable indicator of future returns. Returns from equivalent options of the ARF and STA super funds are used in calculating return for periods that begin before 1 July 2006.
For TTR Income accounts, the investment return is based on the crediting rate for super (accumulation) options. From 1 April 2020 to 2 September 2022 the crediting rate includes an administration fee that is deducted from investment returns for super (accumulation) accounts. TTR Income accounts were adjusted to refund the administration fee deducted from investment returns. All TTR Income administration fees are deducted from account balances.
Choice Income investment option performance as at 30 September 2024
| 3 Months | 1 Year | 3 Years p.a. | 5 Years p.a. | 10 Years p.a. | 15 Years p.a. | |
|---|---|---|---|---|---|---|
| PreMixed Options | ||||||
| High Growth | 3.65% | 15.42% | 6.56% | 8.93% | 10.07% | 10.07% |
| Balanced | 3.45% | 13.16% | 5.49% | 7.47% | 8.97% | 9.25% |
| Socially Aware | 3.78% | 14.13% | 4.86% | 6.56% | 8.10% | 8.73% |
| Indexed Diversified | 4.60% | 18.49% | 6.99% | 8.19% | 8.48% | |
| Conservative Balanced | 3.19% | 10.82% | 3.91% | 5.52% | 7.18% | 7.88% |
| Stable | 2.82% | 8.36% | 2.68% | 3.60% | 5.44% | 6.38% |
| DIY Mix Options | ||||||
| Australian Shares | 7.68% | 21.73% | 11.09% | 11.08% | 11.22% | 10.38% |
| International Shares | 0.99% | 20.78% | 6.52% | 11.64% | 12.37% | 11.84% |
| Diversified Fixed Interest | 2.49% | 5.65% | -0.01% | 0.56% | 2.69% | 4.94% |
| Cash | 1.25% | 4.83% | 3.05% | 2.04% | 2.22% | 2.89% |
Choice Income investment returns are based on crediting rates, which are returns less investment fees and costs, transaction costs and taxes. Past performance isn’t a reliable indicator of future returns.
Macroeconomic environment
After a solid start to the financial year, markets experienced some volatility in August, largely due to weaker US economic data. Despite modest declines in August and early September, key global share markets soon returned to around all-time highs.
In a highly anticipated September meeting, the Federal Reserve cut their benchmark rate by 0.5%. This was the first US interest rate cut in over four years and marked a shift back towards a policy of monetary easing, to support growth and employment rather than manage inflation.
The Reserve Bank of Australia (RBA) indicated that inflation has fallen substantially since the peak in 2022, but they have yet to follow other central banks in cutting interest rates.
Expanding our investment in unlisted assets
During the quarter, AustralianSuper continued to build out key investment capabilities, with the appointment of five senior investment team members in the New York office. This is an important step in the buildout of the Fund’s global investment platform and ability to source large-scale opportunities, particularly in private markets.
This was illustrated recently as AustralianSuper announced its first investment in the US data centre market, with a significant commitment to DataBank, the largest geographic footprint of data centre platforms in North America. This expands AustralianSuper’s exposure to the global digital infrastructure sector and follows the Fund’s investment last year in Vantage Data Centers EMEA, one of the fastest growing hyperscale data centre platforms in the Europe, Middle East and Africa regions. These investments demonstrate how we use our global reach and scale to access opportunities we believe will help deliver sustainable, long-term performance for members.
Outlook ahead
Looking ahead, investment markets are likely to be influenced by factors like the decisions of central banks on interest rates, the US presidential election and developments in the Middle East. As always, we will continue to monitor changes in markets and act accordingly.
We will also continue to remind members that, with super, it's important to stay focused on the long-term. As you can see below, members’ savings invested in the Balanced option have grown significantly over the past 20 years. A balance of $100,000 invested 20 years ago would be worth over $459,000 today – more than four times the initial investment amount.
Growth of $100,000 from 30 September 2004 to 30 September 2024 in the Balanced option
AustralianSuper investment returns are based on crediting rates, which are returns less investment fees and costs, transaction costs, the percentage-based administration fee deducted from returns from 1 April 2020 to 2 September 2022 and taxes. Returns don’t include all administration, insurance and other fees and costs that are deducted from account balances. Returns from equivalent investment options of the ARF and STA super funds are used for periods before 1 July 2006.
Changes to investment option benchmarks
There have been changes to the benchmarks of two investment options, effective from 1 October 2024. The Socially Aware option updated its Consumer Price Index (CPI) objective and the Diversified Fixed Interest option updated its market benchmark.
The Socially Aware option’s CPI objective changed from beating the CPI by more than 4% to beating the CPI by more than 3.5%, over the medium to longer term. Because the Socially Aware option is more limited in what it can invest in – as its ESG screening restricts its investment universe – it was deemed appropriate to reduce its CPI objective by 0.5%.
The Diversified Fixed Interest option has changed its benchmark from shorter maturity benchmarks to all maturity benchmarks, in both Australian and international markets. The new benchmark aligns with members’ use of the option to construct their own portfolio with broad exposure to fixed interest and may increase the expected return of the option as well as the variability of returns.
Learn more
Look out for upcoming webinars and education events to help stay on top of your super.
References
- AustralianSuper Balanced investment option compared to the SuperRatings Fund Crediting Rate Survey – SR50 Balanced (60-76) to 30 September 2024. Returns from equivalent investment options of the ARF and STA super funds are used for periods before 1 July 2006.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
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