Investment market update
03 December 2021
The Balanced Growth Super option and Balanced Growth Income account option for the financial year to 3 December 2021 have returned 2.32% and 2.76% respectively (after indirect costs, and taxes where applicable).
Global share markets have been mixed so far this financial year, with positive performance as a result of improving economic data continually offset by concerns about increasing Coronavirus cases in Europe. Higher inflation has been and continues to be a hot topic, with faster than expected increases in the UK and US. This is placing increased pressure on central banks to look at cooling the rising inflation by raising interest rates and reducing stimulus.
The surge in new Coronavirus cases is a threat to the economic outlook in Europe and the US, particularly if long lockdowns occur. Pleasingly, hospitalisations to date remain reduced relative to 12 months ago.
The main risk domestically remains another wave of Coronavirus cases as restrictions are eased across the country and travel between states increases. Offsetting this concern is Australia’s vaccination rate which is pushing well above that seen in Europe and the US and the rapid deployment of booster shots for those vaccinated five or six months ago.
The Reserve Bank of Australia (RBA) has maintained the cash rate at all-time lows since November 2020. At their latest meeting in November 2021, and in a recent speech by Governor Lowe, the RBA confirmed it is sticking to its more accommodating policy, pushing back against market expectations for a rate hike in 2022. It also conceded that a 2023 hike is possible, although under its “central scenario” the conditions for a rate hike won’t be in place until 2024.
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Past performance is no guarantee of future performance. The information supplied in this email is general advice only and does not take into account or consider your personal objectives, financial situation or needs. Prepared by BUSS (Queensland) Pty Ltd (ABN 15 065 081 281, AFSL 237860) as Trustee for BUSSQ (BUSSQ Fund, ABN 85 571 332 201).