COVID-19 and your super

 

Investment markets around the world have been impacted by the rapid and unpredictable development of COVID-19. Whilst past performance is not a reliable indicator of future performance, history has shown that markets tend to recover over time. This recovery can sometimes happen quickly so it is important to maintain a longer-term focus when considering your superannuation and not let short-term market movements influence long-term investment goals.

The immediate economic impact of Government imposed travel restrictions and social distancing measures that help to contain the spread of COVID-19 have been felt hardest in industries that rely directly on tourists or settings where people would naturally be in close proximity to each other such as in restaurants or at sporting events. While it’s not known how long these measures will last and to what extent the flow on effects will be for the rest of the economy, the Reserve Bank of Australia said in a statement that “at some point, the virus will be contained and the Australian economy will recover. In the interim, a priority for the Reserve Bank is to support jobs, incomes, and businesses, so that when the health crisis recedes, the country is well placed to recover strongly.”*

Periods of negative returns are expected to occur from time to time and Cbus' investment options have been constructed to reflect this. The options have significant investments outside of share markets such as fixed interest investments which are more likely to perform well when interest rates and share markets are falling. Cbus also has significant investments in other asset classes such as infrastructure and property. By making investments across different asset classes, Cbus’ diversified investment strategies are designed to reduce the impact that one asset class such as shares has on members’ overall returns.

Cbus is continuing to monitor your investments as the situation evolves. While the Cbus Investments team have not made any material changes to the portfolio as a result of COVID-19, they are proactively assessing any long-term investment opportunities that arise from lower prices in the short-term.

We have more information available on our website about the impact of COVID-19 including short videos that we encourage you to watch.

If you continue to have concerns, please call Cbus Advice Services on 1300 361 784 and we will assist you at no additional cost. Please note that we are currently experiencing an increased volume of calls.

 

* Reserve Bank of Australia (RBA), Statement by Philip Lowe, Governor: Monetary Policy Decision, Media Release No.2020-08, 19 March 2020.