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- The Growth (Cbus MySuper) option returned 1.64% for the month of January and 14.21% for the 12 months ending 31 January 2020.
- Australian shares rebounded strongly following a weak December, posting gains of 4.89% over the month. Global shares were also on track for a month of good returns; however concerns over the recent coronavirus outbreak weighed on markets and contributed to global shares dropping -0.78% on a hedged basis.
- The Reserve Bank of Australia did not hold a meeting in January so the cash rate remained unchanged at 0.75%.
*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 January 2020 and was reported on 19 February 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 | 0.06% | 1.47% | 1.56% | 1.64% | 1.97% |
| FYTD | 0.52% | 3.92% | 5.46% | 6.84% | 8.60% |
| 1 year | 1.20% | 8.85% | 11.70% | 14.21% | 17.96% |
| 5 years p.a. | 1.57% | 5.58% | n/a | 9.09% | 10.32% |
| 10 years p.a. | 2.37% | 6.32% | n/a | 9.26% | 10.12% |
| Funds managed ($m) | 555.83 | 980.97 | 382.37 | 48,919.97 | 3,005.88 |
*The Conservative Growth accumulation option commenced on 6 July 2017.
Transition to Retirement Option Performance (crediting rate)
| Cash Savings* | Conservative* | Conservative Growth* | Growth* |
High Growth* |
|
|---|---|---|---|---|---|
| 1 month |
0.07% | 1.48% | 1.58% | 1.64% | 1.98% |
| FYTD | 0.56% | 3.97% | 5.53% | 6.88% | 8.64% |
| 1 year |
1.28% | 8.94% | 11.83% | 14.50% | 18.06% |
| 5 years p.a. |
n/a | n/a | n/a | n/a | n/a |
| 10 years p.a. |
n/a | n/a | n/a | n/a | n/a |
| Funds managed ($m) | 9.26 | 26.14 | 199.89 | 183.95 | 27.87 |
*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% | 1.71% | 1.80% | 1.85% | 2.24% |
| FYTD | 0.67% | 4.48% | 6.16% | 7.67% | 9.50% |
| 1 year | 1.53% | 10.10% | 13.36% | 16.11% | 20.06% |
| 5 year p.a | 1.97% | 6.37% | 8.48% | 10.25% | 11.57% |
| 10 year p.a | 2.87% | 7.14% | n/a | 10.35% | 11.30% |
| Funds managed ($m) | 60.68 | 559.37 | 1,371.13 | 1,058.04 | 94.77 |
**The Conservative Growth Income Stream option commenced on 1 December 2013.
Market overview
Global shares markets were mostly down in January over concerns about a new strain of coronavirus and the effect it could have on the global economy. Most European share markets saw declines of over -2% with London’s FTSE 100 losing -3.40%, France’s CAC 40 -2.87% and the DAX in Germany down -2.02%. Off the back of phase one of the US-China trade deal being agreed to which helped to support markets, US shares managed to fare better than most with the S&P 500 ending January down only -0.16% compared to the end of December.
Australian shares rebounded strongly in January, gaining 4.89% after losing -2.02% over December. Whilst all major sectors had positive returns over the month, both Healthcare and Information Technology saw gains of over 10%, up 12.01% and 10.24% respectively. The two worst performing sectors with returns of less than 1% each were Utilities at 0.98% and Energy at 0.57%.
Australian and global bonds provided returns of 2.58% and 2.85% respectively as investors reacted to the coronavirus outbreak by purchasing these more defensive assets and pushing prices up.
The Australian dollar lost ground slightly against the US dollar over the month, finishing January at $0.685 compared to $0.689 at the end of December.
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 2020.
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 31/1/2020 | Growth (Cbus MySuper) |
|---|---|
| Australian shares | 25.03% |
| Global shares | 23.61% |
| Emerging market shares | 5.35% |
| Private equity | 2.97% |
| Absolute return | 1.24% |
| Infrastructure | 11.14% |
| Property | 10.91% |
| Alternative debt | 4.10% |
| Fixed interest | 10.89% |
| Cash | 4.77% |
| Growth / Defensive allocation split | 71.27% / 28.73% |
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 January 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 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.