BUSSQ invested for long term growth
28 August 2023
The financial year 2022-2023 was a roller coaster ride for investment markets. Tough challenges arose as the global economy suffered from lingering COVID-19 shutdowns, a war in Ukraine, rising cost of living, and banking turmoil in the US and Europe. As a result, share markets went through some wild ups and downs.
Despite this volatility, BUSSQ’s Balanced Growth Super option returned 8.81%, and our Balanced Growth Income account option returned 8.53% for the financial year to 30 June 2023*.
To see BUSSQ's end of financial year returns for all options download our June 2023 Market update.
What happened in the markets?
Over the year the global economy experienced all sorts of chaos. The pandemic continued to cause havoc, while the war in Ukraine led to soaring energy costs and worldwide supply issues. These factors contributed to rising inflation, which put pressure on household budgets and businesses.
As a result, central banks were forced to raise official cash rates in an effort to combat inflation. The Reserve Bank of Australia (RBA) went all in, raising the cash rate 12 times in just 13 months, seeing it jump from 0.1% to 4.1% as at 30 June 2023. The significant increase in interest rates had a negative impact on consumer confidence, particularly for those with a mortgage.
On top of this a regional banking crisis unfolded in the US and spread to Europe, culminating with the bailout of three US regional banks and the merger of Credit Suisse with UBS in Switzerland. This led to further volatility in markets, particularly panic in the broader banking sector where there were no real issues other than fear and a lack of confidence. Central banks and governments responded positively however, by providing liquidity and deposit guarantees.
Future outlook
Looking ahead it’s expected that market volatility will continue. There is potential for more interest rate rises, putting more pressure on the cost of living and there's still a range of geopolitical risks that could potentially upset the economy and financial markets.
To mitigate risk around market volatility, BUSSQ maintains a diverse portfolio of investments within our pre-mixed options. We also actively manage our investments, closely following the market to buy, sell, or hold shares where suitable, in our members’ best interests.
Focusing on the long term
Investment markets naturally fluctuate, and it’s important to remember that super is a long term investment.
So, staying patient and committed to your super investments is key. For example, $50,000 invested in our Balanced Growth Super option 20 years ago would be worth $216,781* as at 30 June 2023. That’s four times the initial amount, despite major financial events including COVID-19 pandemic, Global Financial Crisis, Dot.com bubble and 9/11.
The long term performance of our Balanced Growth Super option is proof that compounding can work wonders. If you're investing for the long term, BUSSQ can help achieve your financial goals.
Have questions or after advice?
If you have any questions about our latest performance, your super, how our investments work or want some advice**, simply call us on 1800 692 877 or email super@bussq.com.au.
Finally, thank you to all our members for your continued support.
* Investment returns from 30 June 2023 are net of investment fees and costs, and taxes (where applicable), and the percentage-based administration fee, and for any period prior to 30 June 2023 are net of tax on investment earnings where applicable, and after indirect costs. **BUSSQ members have access to personal financial advice at no extra cost. Personal advice is limited to BUSSQ products and is advice on insurance, investment choice, contributions and retirement. The cost of this advice is included in the administration fees and costs, and this advice is provided by Link Advice Pty Ltd (ABN 36 105 811 836 AFSL 258145). This market update provides general information and advice only and does not take into account your personal investment objectives, financial situation or needs. Before acting, you should review the Product Disclosure Statement (PDS) to ensure you have all the information about the relevant BUSSQ product and how it works and consider the appropriateness of the information to your needs or obtain financial advice tailored for your personal circumstances. The PDSs and Target Market Determinations for BUSSQ products can be found at bussq.com.au/forms-and-resources. Issued by BUSS (Queensland) Pty Ltd ABN 15 065 081 281 AFSL 237860, Trustee for Building Unions Superannuation Scheme (Queensland) (BUSSQ) ABN 85 571 332 201.