Monthly highlights

  • The Growth (Cbus MySuper) option returned 0.65% for the month of December 2019 and 15.07% for the 12 months ending 31 December 2019.
  • The Australian share market went against the global trend by losing ground over December, ending the month down -2.02%. Meanwhile, global share markets capped off a strong year with a December return of 2.70% on a hedged basis, leading to a return for the 2019 calendar year of over 25%. 
  • The Reserve Bank of Australia left the cash rate unchanged at 0.75% in its December Meeting.

*This estimate is based on inflation data for the 10 years to 30 September 2019 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 2019 and was reported on 21 January 2020.

 

 

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 0.05%  -0.04% 0.32% 0.65% 0.54%
FYTD 0.45% 2.42% 3.84% 5.12% 6.50%
1 year 1.30%  8.62%  12.01%  15.07%  19.65%
5 years p.a. 1.60%  5.51% n/a  9.15%  10.43%
10 years p.a. 2.39%  6.11% n/a  8.85%  9.46%
Funds managed ($m) 547.09 975.10 370.90 47,889.88 2,904.20

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

Transition to Retirement Option Performance (crediting rate)

 

  Cash Savings* Conservative* Conservative Growth* Growth*
High Growth*
1 month
0.06% -0.03% 0.33% 0.69% 0.55%
FYTD 0.49% 2.46% 3.89% 5.16% 6.53%
1 year
1.38%  8.70%  12.14%  15.41%  19.75%
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) 9.57 26.37 203.01 179.66 27.70

*These options commenced on 1 July 2017.  

 

Fully Retired Option Performance (crediting rate)

 

  Cash Savings Conservative Conservative Growth* Growth High Growth
1 month 0.08% -0.09% 0.33% 0.67% 0.45%
FYTD 0.58% 2.72% 4.28% 5.71% 7.11%
1 year 1.64% 9.79%  13.62%  17.06%  21.85%
5 year p.a 2.00%  6.29%  8.44%  10.31% 11.67%
10 year p.a 2.89% 6.90% n/a 9.90% 10.57%
Funds managed ($m) 55.22 552.57 1,336.41 1,024.26 95.29

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

 

Market overview

Global share markets continued to climb during December, gaining 2.70% on a hedged basis, and finishing off the year with returns of over 25%. The S&P 500 index in the US and FTSE 100 in the UK both performed strongly on the back of reduced trade war tensions and the re-election of the existing UK Government which started an 11-day rally for UK shares, gaining 2.86% and 2.67% respectively. However, the greatest effect from the de-escalation of trade war tensions was felt over in China with the Shanghai Composite index jumping 6.20%. Returns in the other major global share markets remained mixed but positive, with the CAC 40 in France gaining 1.23%, Japan’s Nikkei up 1.56% and the DAX in Germany seeing only a modest uplift of 0.10%.

 

Australian shares were weighed down in December by weak growth and consumer spending data, losing -2.02% over the period. Despite this, the S&P/ASX 300 Accumulation Index provided returns of 23.77% for the 12 months to 31 December 2019. Most sectors in the Australian market fell during the month with the two most significant falls coming from the Consumer Staples sector at -7.75% and Telecommunication Services sector at -5.46%. Materials and Utilities were the only two sectors in positive territory with returns of 1.82% and 0.78% respectively.

 

Australian and global bonds lost ground as a result of increasing bond yields in December, returning -1.89% and -1.40% respectively.

The Australian dollar edged up slightly against the US dollar during the month, finishing December at $0.689 compared to $0.683 at the end of November.

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 2019.

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 31/12/2019 Growth (Cbus MySuper)
Australian shares 26.94%
Global shares 21.11%
Emerging market shares 5.49%
Private equity 3.04%
Absolute return 1.25%
Infrastructure 11.21%
Property 11.04%
Alternative debt 4.20%
Fixed interest 10.80%
Cash 4.93%
Growth / Defensive allocation split 71.05% / 28.95%  

Note: Growth assets include Australian Shares, International Shares, Private Equity, Absolute Return, 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 2019. 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.