Market update January 2021 - Strong recovery in first half

12 January 2021

The first half of the financial year has seen a sharp recovery in the share market with the local market up 13% and the global share market up around 9.7% in Australian dollars.

BUSSQ’s Balanced Growth Super option and Balanced Growth Income account option have returned 8.56% and 8.00% for the financial year to 31 December 2020 and for the 2020 calendar year they have returned 5.10% and 4.29% respectively.

Our medium and long term returns also remain strong sitting at 7.53% for 5 years and 8.25% for 10 years for our Balanced Growth Super option.

The 2020-21 financial year started from a low point with Australia going into its first recession in 27 years during the June quarter. With borders remaining closed due to Coronavirus and economic activity slow, the Australian government continued a raft of fiscal measures including JobKeeper to support businesses, jobs, and income.

This Government support and the Reserve bank of Australia’s (RBA) monetary policy contributed to Australia’s economy bouncing back faster than expected, with the September quarter growing 3.3%1. To further support economic recovery from the pandemic and encourage job growth, in November the RBA cut rates from already low levels to 0.1%2

We remain cautiously optimistic for 2021 due to several reasons, including:

  • The deployment across the US, UK and Europe of vaccines with high levels of effectiveness which are expected to slow down the spread of Coronavirus.
  • Central banks and governments globally committing to fiscal stimulus and easy monetary policy.
  • The US presidential change with President Biden which should lead to a more stable leadership.

We are still likely to see bouts of volatility during 2021 driven by ongoing Coronavirus infections, deployment of the Coronavirus vaccine and tensions between China and US/Australia. Closer to home Australia has done a better job of controlling the virus and has had a stronger policy on stimulus than most countries.

During these challenging times we will continue to actively manage our members retirement savings. We will maintain a diversified portfolio of investments, including unlisted assets such as property and infrastructure which have provided some protection against volatility in global markets.

Our latest investment returns are available on our monthly investment performance page.

1. Australian National Accounts: National Income, Expenditure and Product, September 2020 abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/latest-release. 2. Statement by Philip Lowe, Governor: Monetary Policy Decision, November 2020 rba.gov.au/media-releases/2020/mr-20-28.html. 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. This information is general advice only and does not take into account or consider your personal objectives, financial situation or needs. Before acting, you should review the relevant Product Disclosure Statement to ensure you have all the information about the BUSSQ product and how it works and consider the appropriateness of the information to your needs or seek independent advice from a properly qualified professional. Prepared by BUSS (Queensland) Pty Ltd (ABN 15 065 081 281, AFSL 237860) as Trustee for BUSSQ (BUSSQ Fund, ABN 85 571 332 201).

Related Topics