End of year market update
17 August 2020
The 2019-20 financial year has been a rough ride for members. Even though it was a challenging 12 months all of BUSSQ's pre-mixed investment options managed a positive return for the year, which highlights the importance of having a diversified portfolio of assets.
Our Balanced Growth super option returned 2.46% for the financial year and was one of the top performing balanced funds in Australia, as rated by SuperRatings^.
The Balanced Growth Income account option returned 1.83% for the financial year and was also one of SuperRatings top performing balanced funds in Australia^.
From the start of the financial year into early 2020 there was a strong return from shares with the Australian market reaching record highs.
As the coronavirus pandemic unfolded in China the expectations of global growth disappeared. The Australian share market fell around 35% and the Australian dollar plunged in March. Central Banks globally cut interest rates where possible, and the Reserve bank of Australia cut interest rates in March to 0.25%.
From the low, global share markets started to recover fuelled by promise of significant levels of stimulus to help the economy and a decline in new coronavirus cases. Despite this, over the financial year global sharemarkets rose around 5% led by the US share market and its exposure to technology and health care companies. The Australian sharemarket over the financial year was down 7.7%.
There remain several risks globally which have the potential to lead to further volatility within investment markets over the next year.
These include:
■ coronavirus remaining at elevated levels,
■ higher unemployment, and
■ the outcome of the US election later this year.
Offsetting some of these risks are that central banks and governments remain committed to support economies with stimulus being extended in Australia and likely around the world over the next year.
In order to protect members' balances we will continue to maintain a diversified portfolio of investments and look for opportunities to add value.
We have continued to deliver strong long term returns above the SuperRatings median helping our members maximise their retirement savings^.
See our 30 June investment returns.
* Performance comparison sourced from SuperRatings SR50 Balanced (60-76) Survey as at 30 June 2020. ^Performance comparison sourced from SuperRatings SRP50 Balanced (60-76) Survey as at 30 June 2020. SuperRatings does not issue, sell, guarantee, or underwrite this product. See superratings.com.au for details of its ratings criteria. Returns are after investment fees and applicable taxes. Past performance is no guarantee of future performance. Performance is only one thing to consider when choosing a super fund. For more information go to moneysmart.gov.au.