Monthly highlights

  • The Growth (Cbus MySuper) option returned -0.58% for the month of December 2018 and 1.84% for the 12 months ending 31 December 2018.
  • The Australian share market ended the month -0.23% and global shares were down, returning -3.66% on an unhedged basis in December. Share markets stabilised after the volatility of previous months, however all markets failed to deliver the "Santa rally" that generally occurs in December. 
  • The Reserve Bank of Australia left the cash rate unchanged at 1.5% at its December meeting.

*This estimate is based on inflation data for the 10 years to 30 September 2018  as inflation data is only available quarterly. It is based on a weighted average of the investment performance objective over the past 10 years.

**SuperRatings is a ratings agency that collects information from superannuation funds to enable performance comparisons. The SR 50 Balanced Survey includes investment options that are broadly similar to the Growth (Cbus MySuper) option, as these funds are all diversified with an allocation to growth assets of between 60% and 76%. SuperRatings data is for December 2018 and was reported on the 21 January 2019.

 

 

Growth (Cbus MySuper) investment objective

From November 2015, a return objective of at least 3.25% p.a. above the rate of inflation, after investment fees and tax over a 10 year period, expected to be achieved at least 75% of the time, with a likelihood of a negative annual return being 3 in every 20 years.

 

Over the past 10 years, the Growth (Cbus MySuper) option has outperformed its investment objective and outperformed the SuperRatings SR50 Balanced median.

Super Investment Option Performance (crediting rate)

 

  Cash Savings** Conservative Conservative Growth* Growth (Cbus MySuper) High Growth
1 month 0.13%  0.29% -0.14% -0.58% -1.25%
FYTD 0.87% 0.16% -1.07% -2.26% -4.66%
1 year 1.65%  2.56%  2.10%  1.84%  -0.21%
5 years p.a. 1.79%  5.07% n/a  7.87%  8.45%
10 years p.a. n/a  5.84% n/a  8.21%  9.76%
Funds managed ($m) 567.61 853.73 188.89 39,592.40 2,186.77

*The Conservative Growth accumulation option commenced on 6 July 2017.

**The Cash Savings accumulation option commenced on 1 April 2009.

Transition to Retirement Option Performance (crediting rate)

 

  Cash Savings* Conservative* Conservative Growth* Growth*
High Growth*
1 month
0.14% 0.29% -0.13% -0.52% -1.25%
FYTD 0.91% 0.17% -1.05% -2.19% -4.64%
1 year
1.73%  2.63%  2.32%  2.07%  0.08%
5 years p.a,
n/a n/a n/a n/a n/a
10 years p.a.
n/a n/a n/a n/a n/a
Funds managed ($m) 8.86 29.04 182.53 152.73 22.56

*These options commenced on 1 July 2017.  

 

Fully Retired Option Performance (crediting rate)

 

  Cash Savings* Conservative* Conservative Growth** Growth* High Growth*
1 month 0.16%  0.41% 0.06% -0.37% -1.08%
FYTD 1.07% 0.31% -0.75% -2.18% -4.90%
1 year 2.04%  2.98%  2.91%  2.40%  0.11%
5 year p.a 2.22%  5.75%  7.37%  8.86% 9.54%
10 year p.a n/a n/a n/a n/a n/a
Funds managed ($m) 74.72 473.00 937.19
797.72 67.38

*Returns for all Super Income Stream options are not yet available for the 10 year period. 

**The Conservative Growth Income Stream option commenced on 1 December 2013.

 

Market overview

Global markets missed the cheer of a “Santa rally” that generally comes in the second half of December, with markets delivering a third month of volatility.

In the US, the S&P 500 closed down -9.18%, driven partially by the government stalemate over the funding of President Trump’s US/Mexico Wall, ongoing concern over trade wars with China and the threat of rising interest rates.

As negotiations around the UK’s exit from the European Union continued, the FTSE closed down -3.61% but still managed to be the best performing market in Europe for December.  Germany’s DAX dropped closing at -6.20%, with the CAC in France not far behind Germany, closing at -5.46% in December. 

Japan had its worst December since 1959, closing down -10.45%.  They’re fighting the threat of recession as 2018 saw a large sell off by foreign investors, mainly driven by global trade uncertainty.

Australian shares only added slightly to November’s losses, with the ASX300 closing December at -0.23%. The Energy sector fell -2.20% after two months of -10% returns.  However, financials reversed November’s increase to close at -3.13%. The Materials sector was the best performer in December closing at 5.13% while Telecom Services was the worst performing sector closing the month at -5.05%.

Both Australian and global bonds had strong months, returning 1.50% and 1.63% respectively in December.

The Reserve Bank of Australia (RBA) left the cash rate on hold at its December meeting at 1.50%. The Australian dollar finished down slightly at $0.716 against the US dollar.

Sources: FactSet, Frontier Advisors, Citigroup and JP Morgan. The investment market returns represented above are not Cbus asset class returns. They are returns for each market as measured by standard market indices. More information on these market indices can be found in the Glossary. For unhedged international shares and market shares, when the Australian dollar falls against currencies in major share markets, and there is no currency hedging, international market returns in Australian dollar terms are higher.

 

Source: FactSet. Monthly sector returns are represented by the S&P/ASX 300 (Accumulation) sectors for the month ending 31 December 2018.

Asset allocation

The Strategic Asset Allocations for all investment options can be found on the following pages:

Super Options

Transition to Retirement Options

Fully Retired Options

The Actual Allocation for the Growth (Cbus MySuper) option is shown below.

 

Actual allocation 31/12/2018 Growth (Cbus MySuper)
Australian shares 23.32%
Global shares 21.67%
Emerging market shares 4.00%
Private equity 3.84%
Absolute return 2.69%
Infrastructure 12.01%
Property 12.15%
Alternative debt 6.17%
Fixed interest 9.22%
Cash 4.94%
Growth / Defensive allocation split 70.70% / 29.30%  

Note: Growth assets include Australian Shares, International Shares, Private Equity, Opportunistic Growth, 50% of Infrastructure, 50% of Property and 50% of Alternative Debt. Defensive assets include Cash, Fixed Interest, 50% of Infrastructure, 50% of Property and 50% of Alternative Debt.

 

 

Figures are subject to rounding. Actual asset allocation is current as at 31 December 2018. Asset classes are the building blocks of our investment options. We allocate different proportions to each asset class with the aim of meeting each option’s investment risk and return objective. By investing across a range of asset types, the risk of loss is reduced through diversification. 

For more information see asset classes.

We periodically review our investment strategy and believe that the Growth (Cbus MySuper) option is well positioned for growth over the medium to long term, while maintaining some defensive exposure. Cbus’ investment options, with the exception of the Cash Savings option, are broadly diversified across asset classes.

 

Glossary

Investment type Market index

Australian shares

S&P ASX 300 Accumulation Index

Global shares – currency hedged

MSCI All Countries World Ex-Australia Index (Hedged, $A)

Global shares – currency unhedged

MSCI All Countries World Ex-Australia ($A)

Emerging markets – currency unhedged

MSCI Emerging Markets ($A)

Australian unlisted property

MSCI/IPD Australian Property Pooled Index

Australian bonds

Bloomberg AusBond Composite Bond Index

Global bonds

Citi World Government Bond Index (Hedged, $A)

Australian cash

Bloomberg AusBond Bank Bill Index

Disclosure

Past performance is not a reliable indicator of future performance. All Cbus performance and return figures disclosed in this investment update are based on the crediting rate, which is the return minus investment fees, the Trustee Operating Cost and taxes. Excludes account keeping administration fees.

The information is about Cbus. It doesn’t take into account your specific needs, so you should look to your own financial position, objectives and requirements before making any financial decisions. Read the Cbus Product Disclosure Statement to decide whether Cbus is right for you, or call 1300 361 784 for a copy.