Monthly highlights

  • The Growth (Cbus MySuper) option returned 1.11% for the month of July and 0.58% for the 12 months ending 31 July 2020.
  • Share market indices continued to deliver positive returns in July with International (1.11%) and emerging markets (4.60%) outperforming the Australian share market (0.60%).
  • The Reserve Bank of Australia left the cash rate unchanged at 0.25% at its meeting on 4 August.

*This estimate is based on inflation data for the 10 years to 30 June 2020 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 June 2020 and was reported on 19 August 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 0.00% 0.62% 0.76% 1.11% 1.43%
FYTD  0.00% 0.62% 0.76% 1.11% 1.43%
1 Year 0.62% 2.36% 1.66% 0.58% 0.31%
5 Years p.a. 1.43% 4.85% n/a 6.92% 7.67%
10 Years p.a. 2.20% 5.89% n/a 8.48% 9.32%
Funds managed ($m) 1,629.57 1,123.15 511.27 44,162.88 2,750.77

*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 0.00% 0.62% 0.77% 1.08% 1.43%
FYTD  0.00% 0.62% 0.77% 1.08% 1.43%
1 Year 0.66% 2.40% 1.74% 0.85% 0.35%
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) 19.21 28.98 170.30 150.51 24.65

*These options commenced on 1 July 2017. 

Fully Retired Option Performance (crediting rate)

 

  Cash Savings Conservative Conservative Growth* Growth High Growth
1 month 0.00% 0.64% 0.92% 1.16% 1.57%
FYTD  0.00% 0.64% 0.92% 1.16% 1.57%
1 Year 0.79% 2.89% 2.35% 0.83% 0.04%
5 Years p.a. 1.78% 5.62% 7.02% 7.92% 8.60%
10 Years p.a. 2.67% 6.71% n/a 9.52% 10.42%
Funds managed ($m) 202.81 585.90 1,316.95 900.75 82.42

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

 

Market overview

With the northern hemisphere in peak summer holiday season and restrictions from COVID-19 easing in many countries we have seen an uptick in daily cases again in former European hot spots and the UK.  The US continues to have the highest absolute COVID-19 case numbers followed by Brazil and India.

While broader global and Emerging Market share market indices had positive returns for July, there was significant divergence between individual countries.  USA returned 5.51% and China 10.90%, while June’s outperforming share markets France and Germany returned -3.09% and 0.02% respectively for July.

The Australian market delivered 0.60% for July, lower than June but not surprising given Victoria moved back into Stage 3 lockdowns on 9 July following a sharp uplift in COVID-19 cases.  Materials and Information Technology were the best performing Australian market sectors and Healthcare and Industrials the lowest.

Global bonds returned 0.54% for July, with Australian bonds at 0.28%, both significantly higher than Cash with 0.01%. 

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:

Super Options

Transition to Retirement Options

Fully Retired Options

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

 

Actual allocation 31/7/2020 Growth (Cbus MySuper)
Australian shares 22.63%
Global market shares 21.75%
Emerging market shares 5.49%
Private equity 2.87%
Alternative growth 0.97%
Infrastructure 11.45%
Property 11.98%
Mid-risk alternatives 4.83%
Fixed interest 10.29%
Cash 7.74%
Growth / Defensive allocation split 67.84% / 32.16%

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 31 July 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.