Monthly highlights

  • The Growth (Cbus MySuper) option returned 2.40% for the month of January 2019 and 3.20% for the 12 months ending 31 January 2019.
  • The Australian share market rebounded strongly after the negative returns experienced in the final few months of 2018, up 3.87% over the month of January. Global share markets felt a similar uplift, ending January up 4.08% on an unhedged basis.
  • The US Federal Reserve has indicated that interest rates in the US will increase at a slower pace than previously expected in their January statement. 
  • As the Reserve Bank of Australia did not meet in January the cash rate remained unchanged at 1.5%.

*This estimate is based on inflation data for the 10 years to 31 December 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 January 2019 and was reported on 19 February 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 0.16%  1.25% 1.84% 2.40% 3.42%
FYTD 1.04% 1.41% 0.75% 0.09% -1.40%
1 year 1.67%  3.50%  3.29%  3.20%  1.79%
5 years p.a. 1.78%  5.34% n/a  8.56%  9.47%
10 years p.a. n/a  5.99% n/a  8.60%  10.38%
Funds managed ($m) 553.18 869.34 200.76 40,801.38 2,278.06

*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
0.16% 1.25% 1.86% 2.44% 3.43%
FYTD 1.07% 1.43% 0.79% 0.20% -1.37%
1 year
1.75%  3.57%  3.54%  3.48%  2.08%
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) 9.25 28.33 187.12 153.21 23.91

*These options commenced on 1 July 2017.  

 

Fully Retired Option Performance (crediting rate)

 

  Cash Savings* Conservative* Conservative Growth** Growth* High Growth*
1 month 0.19%  1.42% 2.03% 2.68% 3.76%
FYTD 1.26% 1.74% 1.26% 0.43% -1.32%
1 year 2.07%  4.08%  4.30%  4.03%  2.41%
5 year p.a 2.21%  6.06%  7.89%  9.63% 10.66%
10 year p.a n/a n/a n/a n/a n/a
Funds managed ($m) 60.42 481.51 984.41
830.30 75.98

*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

In the U.S., the S&P 500 finished the month up 7.87% following the U.S. Federal Reserve’s statement indicating that increases in interest rates will occur at a slower pace than previously expected by the market. This statement helped drive up other markets over January despite the upcoming 29 March deadline for the UK’s exit from the European Union and the ongoing trade war between the U.S. and China. In January, London's FTSE was up 3.58%, France’s CAC 40 up 5.54%, and the DAX in Germany up 5.82% after being down 6.20% in December. Japan’s Nikkei managed to regain some of their losses, however, are only up 3.79% in January after falling 10.45% in December.

Australian shares also experienced a positive month, with the ASX300 closing January up 3.87%. The Energy sector had a stellar month, increasing 11.46% over January after falling 21.6% in the last quarter of 2018. The Materials, Utilities, Information Technology and Telecom Services sectors all saw gains of over 5%, meanwhile Financials was the only sector to see negative returns, closing the month -0.25%.

Australian and global bonds provided returns of 0.64% and 0.73% respectively in 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.

 

Source: FactSet. Monthly sector returns are represented by the S&P/ASX 300 (Accumulation) sectors for the month ending 31 January 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 31/1/2019 Growth (Cbus MySuper)
Australian shares 23.41%
Global shares 21.22%
Emerging market shares 4.21%
Private equity 3.59%
Absolute return 2.57%
Infrastructure 11.60%
Property 11.77%
Alternative debt 6.04%
Fixed interest 10.52%
Cash 5.05%
Growth / Defensive allocation split 69.70% / 30.30%  

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 January 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.