A fantastic year for members – 2020/21
Great investment returns for our members
It’s been a rewarding year for members, with the Balanced (MySuper) option delivering 17.49% - the highest return in CareSuper’s 35-year history.
The Balanced (MySuper) option (in which most super members invest) returned 17.49% over the 2020/21 financial year. The pension Balanced option also performed well, returning 18.92%.
This record outcome is a great result for our members and the highest financial year return for the Balanced option in CareSuper’s 35-year history. It’s also the 12th consecutive year of positive returns – which is quite an achievement given the sharp share market falls at the onset of the pandemic.
All our other investment options delivered positive returns too. The Overseas Shares, Australian Shares, and Growth options delivered the strongest returns, while our Alternative Growth, Conservative Balanced, Capital Stable and Direct Property options also posted satisfying gains. The Capital Guaranteed, Fixed Interest and Cash option returns were positive, though quite low.
You can see the performance of all our investment options set out in the performance table on our website.
HOW WE COMPARE LONG TERM
While this year’s remarkable returns are rewarding for members, it’s not the annual returns that matter. It’s the sustained long-term returns that we deliver to our members that make a difference to retirement outcomes.
CareSuper’s Balanced (MySuper) option continues to outperform over the long term. According to independent ratings agency SuperRatings, our Balanced option, has delivered 9.13% per annum over the past 10 years – placing it in the top 5 of all surveyed balanced funds in Australia. It was also among the top performers over other long-term timeframes.*
And for the majority of our pension members who have their money invested in our Balanced, Conservative Balanced and Capital Stable options, there's more great news. All of these options ranked in the top quartile over 10 years.^
Suzanne Branton, CareSuper’s Chief Investment Officer, says these returns are the result of our long-term focus and active approach to investing. ‘Our members are in it for the long term, and so are we,’ she says. ‘Strong one-year results are a great boost for your super in the short-term but we’re investing with a longer horizon in mind, so those longer-term figures are a true measure of our success.’
THE KEY DRIVERS BEHIND OUR RETURNS
Fuelled by extraordinary monetary and fiscal stimulus from central banks and governments around the world, share markets were the key driver of performance over the past financial year.
The overseas share markets delivered 28.1% (unhedged) for the year and the US share market was up 40.8% The Australian share market also had strong results delivering 28.5% over the financial year.# This means that the best performers were those options with higher allocations to shares.
While shares were the standout, our unlisted assets also did quite well. In particular, we saw some great returns from our private equity, credit and infrastructure investments (which form part of our Alternatives asset class). Returns from our direct property investments were also solid for the year.
In contrast, returns from fixed interest and cash were much lower – reflective of record low levels of interest rates across the world. Members invested in options with a high allocation to these asset classes, received more subdued returns.
WHAT WE CAN EXPECT AFTER A RECORD-BREAKING YEAR
Despite share markets having seen one of the strongest growth years on record, we are conscious that markets reflect a great deal of optimism – and shares are expensive.
According to Chief Investment officer Suzanne Branton, ‘Our overarching message is that members should not expect to keep seeing these sorts of results. Last year is not a good benchmark to set expectations or to assess the future. There are positive influences on the horizon, but the outlook will include cycles, challenges and varying conditions in financial markets.'
‘With this in mind, we expect our approach to actively select investments and our focus on risk as well as return will serve members well. It’s about protecting your retirement savings as well as delivering long-term real growth’, Branton added.
CareSuper’s performance figures shown are net of investment fees, indirect costs and tax and have been rounded to two decimal places. Past performance is not a reliable indicator of future performance and you should consider other factors before choosing a fund or changing your investments.
* SuperRatings Fund Crediting Rate Survey - SR50 Balanced (60-76) Index, June 2021.
^ SuperRatings Pension Fund Crediting Rate Survey - SRP50 Balanced (60-76) Index, June 2021.
# Source: Bloomberg.