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The latest superannuation news and information, and investment news including share markets and movements in the economy.
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- The Growth (Cbus MySuper) option returned -2.86% for the month of February and 8.58% for the 12 months ending 29 February 2020.
- COVID-19 started to impact share markets as Australian and Global shares dropped -7.76% and -7.90% respectively over the month of February.
- The Reserve Bank of Australia left the cash rate unchanged at 0.75% in its February Meeting.
*This estimate is based on inflation data for the 10 years to 31 December 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 February 2020 and was reported on 19 March 2020.
Growth (Cbus MySuper) investment objective
From February 2020, 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, with a likelihood of a negative annual return being 3 to 4 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 | 0.08% | -0.60% | -1.87% | -2.86% | -4.69% |
| FYTD | 0.59% | 3.29% | 3.48% | 3.79% | 3.50% |
| 1 year | 1.13% | 7.14% | 7.86% | 8.58% | 8.85% |
| 5 years p.a. | 1.55% | 5.19% | n/a | 7.81% | 8.37% |
| 10 years p.a. | 2.34% | 6.19% | n/a | 8.87% | 9.50% |
| Funds managed ($m) | 606.55 | 996.72 | 380.94 | 47,367.74 | 2,856.01 |
*The Conservative Growth accumulation option commenced on 6 July 2017.
Transition to Retirement Option Performance (crediting rate)
| Cash Savings* | Conservative* | Conservative Growth* | Growth* |
High Growth* |
|
|---|---|---|---|---|---|
| 1 month |
0.08% | -0.60% | -1.89% | -3.02% | -4.69% |
| FYTD | 0.63% | 3.34% | 3.54% | 3.66% | 3.54% |
| 1 year |
1.19% | 7.21% | 7.95% | 8.61% | 8.94% |
| 5 years p.a. |
n/a | n/a | n/a | n/a | n/a |
| 10 years p.a. |
n/a | n/a | n/a | n/a | n/a |
| Funds managed ($m) | 12.14 | 25.82 | 193.95 | 174.96 | 26.40 |
*These options commenced on 1 July 2017.
Fully Retired Option Performance (crediting rate)
| Cash Savings | Conservative | Conservative Growth* | Growth | High Growth | |
|---|---|---|---|---|---|
| 1 month | 0.09% | -0.69% | -1.93% | -3.40% | -5.31% |
| FYTD | 0.76% | 3.76% | 4.11% | 4.00% | 3.69% |
| 1 year | 1.43% | 8.11% | 9.18% | 9.39% | 9.61% |
| 5 year p.a | 1.94% | 5.92% | 7.58% | 8.78% | 9.40% |
| 10 year p.a | 2.84% | 6.99% | n/a | 9.89% | 10.59% |
| Funds managed ($m) | 71.12 | 558.89 | 1,368.01 | 1,026.63 | 89.15 |
**The Conservative Growth Income Stream option commenced on 1 December 2013.
Market overview
Global share markets experienced significant declines in February as governments acted to slow the spread of COVID-19 by implementing wide-reaching trade and travel restrictions. These measures; combined with the uncertainty around how long they will be in place for saw European share markets fall over 8% with the CAC 40 in France losing -8.55%, the Dax in Germany -8.41%, and the UK’s FTSE 100 down -9.68%. Shares over in the US posted similar losses with the S&P 500 index losing -8.41% over February.
February saw Australian shares markets surrender their gains from the start of the financial year, with the February decline of -7.76% bringing the total returns from 30 June 2019 close to breakeven at -0.09%. Whilst all sectors in the Australian share market lost ground over the month, the Materials, Information Technology, and Energy sectors were the hit the hardest and dropped by -11.69%, -16.31%, and -17.42% respectively. Despite Healthcare being considered the best performing sector over the month, shares in the industry were down by -3.95%. This was followed closely by shares in the Utilities sector which were down by a similar -3.96%.
Australian and global bonds provided returns of 0.95% and 1.64% respectively as investors reacted to the coronavirus outbreak by purchasing these more defensive assets and continuing to push prices up.
The Australian dollar lost ground against the US dollar over the month, finishing February lower by -2.7% at $0.666 compared to $0.685 at the end of January.
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.
Asset allocation
The Strategic Asset Allocations for all investment options can be found on the following pages:
Transition to Retirement Options
The Actual Allocation for the Growth (Cbus MySuper) option is shown below.
| Actual allocation 29/2/2020 | Growth (Cbus MySuper) |
|---|---|
| Australian shares | 23.59% |
| Global shares | 24.24% |
| Emerging market shares | 5.89% |
| Private equity | 3.15% |
| Alternative growth | 1.78% |
| Infrastructure | 11.32% |
| Property | 11.26% |
| Mid-risk alternatives | 4.21% |
| Fixed interest | 11.77% |
| Cash | 2.79% |
| Growth / Defensive allocation split | 72.05% / 27.95% |
Note: Growth assets include Australian Shares, International Shares, Private Equity, Alternative Growth, 50% of Infrastructure, 50% of Property and 50% of Mid-Risk Alternatives. Defensive assets include Cash, Fixed Interest, 50% of Infrastructure, 50% of Property and 50% of Mid-Risk Alternatives.
Figures are subject to rounding. Actual asset allocation is current as at 29 February 2020. 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 taxes, and until 31 January 2020, the percentage-based administration fee. Excludes fees and costs that are deducted directly from members’ accounts.
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.