BUSSQ Investment market update July 2026

The 2025/26 financial year was shaped by strong but uneven share market returns, changing interest rates and continued uncertainty across global markets. These factors all influenced how diversified investment options, including our Balanced Growth option, performed over the year.

Globally, much of the share market strength was driven by companies linked to artificial intelligence and data centres. Because the Australian share market has less exposure to these types of companies, it underperformed in comparison to long term averages and global markets.

In the United States (US), the S&P 500 recovered strongly from a 9% fall after the conflict in Iran broke out on February 28 to reach record highs again by mid-April~.

A small number of large technology companies continued to drive a significant share of returns in the US. Energy and materials companies also benefited from increased focus on energy supply and security.

Emerging market returns were also driven by the strong performance of companies linked to artificial intelligence, while other parts of the market delivered more mixed outcomes.

Outside share markets, returns were broadly in line with expectations. Australian commercial and industrial property continued to see a gradual improvement in confidence. Australian and international infrastructure delivered returns around their long term averages. These assets were less affected by higher interest rates and inflation than expected, and the Middle East conflict did not have a material impact on airports or ports.

Higher interest rates supported cash returns, but they continued to place pressure on bond values.

At BUSSQ we continue to monitor the changes made to our investment strategy which included reducing exposure to active managers and increasing exposure to enhanced index Australian and international bond and share managers. The performance outcomes delivered in the last quarter of the year show early encouraging results post implementation of the material changes to our investment portfolio.

For members, the BUSSQ Super Balanced Growth option returned 5.89% and the Income Account Balanced Growth returned 5.79% for the 2025/26 financial year.

Our High Growth and Defensive investment options closed on 1 June 2026. Members invested in these options had their balances moved into a mix of Balanced Growth and single asset class options.

Members can view BUSSQ’s Investment Performance or view your investment mix by logging in to your member online account.

Looking ahead

There are still risks that could create more volatility and affect investment returns. These include inflation, the possibility of further interest rate rises and weaker household spending in Australia. Consumer demand has held up better in the US but remains lower in Europe and the United Kingdom.

The 2025/26 financial year was yet another reminder that super is a long term investment and returns can move up and down from year to year. It also shows why reacting to short term market falls can be risky, as markets can recover quickly after periods of volatility. Diversification, like through our Balanced Growth option, helps manage the risk of relying on one asset class or market.

BUSSQ is here for you

Members who would like to understand their investment options, or who are thinking about making a change, can contact BUSSQ for help on 1800692 877.