Investment markets – a snapshot - November 2023

The start of the year saw a strong performance in the investment markets, but the quarter ending September 30, 2023, brought quite a lot of ups and downs. Despite this, our Balanced (MySuper) option, where most of our members have their investments, managed to deliver a positive return of 0.4%. This compares favourably to the median (or average) fund, which saw a -0.5% dip.¹

WRAP OF PERFORMANCE

In the midst of considerable market fluctuations, CareSuper’s Balanced option stood its ground, yielding returns of 0.38% for super accounts and 0.55% for pension accounts over the quarter. These figures are well above the median balanced fund, which dropped by -0.52% for super accounts and -0.59% for pension accounts.

While short-term results can be volatile, these numbers underline the importance of keeping a long-term view of your super. Over a 10-year period, our Balanced option has consistently performed well, with average annual returns of 7.58% for super accounts and 8.21% for pension accounts as of September 30, 2023. This track record demonstrates CareSuper’s capability to generate consistent, long-term value for our members.

See a more detailed view of our performance across different investment options and time frames.

WHAT HAPPENED IN MARKETS

The last quarter saw the investment markets in a bit of a roller coaster ride, largely due to persisting inflation worries and changes in interest rates. The markets had a promising start in July, as signs of decreasing global inflation and sustained economic strength were apparent, despite ongoing high interest rates.

However, as the quarter went on, challenges increased. Central banks, especially the US Federal Reserve, remained committed to tackling inflation, leading to a shift in interest rate outlooks and indications that rate cuts might not happen until late 2024. Notably, the European Central Bank raised its deposit rate to an all-time high of 4% since the introduction of the Euro in 1999.

These market movements had a knock-on effect across various investment types, leading to a scenario where both fixed interest and share markets experienced declines simultaneously, typically associated with high inflation lower growth expectations. The equity markets were particularly hit, as reduced economic growth expectations resulted in weaker performance.

In Australia, the share market followed the global pattern, with its fluctuations mirroring the wider economic and geopolitical situations. The Australian dollar had its ups and downs but remained mostly stable throughout the quarter.

Despite these challenging market conditions, our Balanced (MySuper) option demonstrated resilience, yielding a positive return of 0.38% and outperforming the median fund, which saw a -0.52% decrease. This performance is a testament to our commitment to safeguarding and enhancing our members' investments, even when the going gets tough.

LOOKING AHEAD

Looking forward to the rest of 2023, the investment landscape remains fraught with challenges. We anticipate the same issues that shaped the markets in the September quarter, such as inflation and interest rate concerns, along with geopolitical tensions in the Middle East, will continue to contribute to market volatility.

CareSuper’s Chief Investment Officer shares that ‘While the road ahead is filled with challenges, our priority is on actively managing our portfolio and diversifying our investments to balance risks and capitalise on growth opportunities. Our unwavering commitment is to deliver strong and consistent long-term returns for our members’.

¹ SuperRatings Fund Crediting Rate Survey - SR50 Balanced (60-76) Index, September 2023.