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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 1.61% for the month of June and 0.75% for the 12 months ending 30 June 2020.
- Three months after the recent COVID-19 related share market lows Australian and Global shares have continued to deliver positive returns for their third consecutive month with monthly returns of 2.43% and 2.79% respectively.
- The Reserve Bank of Australia left the cash rate unchanged at 0.25% in its meeting on 7 July.
*This estimate is based on inflation data for the 10 years to 31 March 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 21 July 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% | 0.50% | 1.12% | 1.61% | 2.19% |
| FYTD | 0.73% | 2.50% | 1.93% | 0.75% | 0.63% |
| 1 Year | 0.73% | 2.50% | 1.93% | 0.75% | 0.63% |
| 5 Years p.a. | 1.46% | 4.96% | n/a | 7.13% | 7.98% |
| 10 Years p.a. | 2.24% | 5.91% | n/a | 8.54% | 9.44% |
| Funds managed ($m) | 1,678.51 | 1,108.75 | 495.94 | 44,168.03 | 2,714.09 |
*The Conservative Growth accumulation option commenced on 6 July 2017.
Transition to Retirement Option Performance (crediting rate)
| Cash Savings* | Conservative* | Conservative Growth* | Growth* |
High Growth* |
|
|---|---|---|---|---|---|
| 1 month | 0.00% | 0.50% | 1.13% | 1.62% | 2.19% |
| FYTD | 0.78% | 2.55% | 2.02% | 1.06% | 0.68% |
| 1 Year | 0.78% | 2.55% | 2.02% | 1.06% | 0.68% |
| 5 Years p.a. | n/a | n/a | n/a | n/a | n/a |
| 10 Years p.a. | n/a | n/a | n/a | n/a | n/a |
| Funds managed ($m) | 20.96 | 28.75 | 174.73 | 153.82 | 25.14 |
*These options commenced on 1 July 2017.
Fully Retired Option Performance (crediting rate)
| Cash Savings | Conservative | Conservative Growth* | Growth | High Growth | |
|---|---|---|---|---|---|
| 1 month | 0.01% | 0.77% | 1.25% | 1.78% | 2.43% |
| FYTD | 0.93% | 3.15% | 2.59% | 1.15% | 0.49% |
| 1 Year | 0.93% | 3.15% | 2.59% | 1.15% | 0.49% |
| 5 Years p.a. | 1.82% | 5.77% | 7.20% | 8.16% | 8.95% |
| 10 Years p.a. | 2.72% | 6.73% | n/a | 9.59% | 10.56% |
| Funds managed ($m) | 219.40 | 576.01 | 1280.71 | 891.91 | 80.30 |
**The Conservative Growth Income Stream option commenced on 1 December 2013.
Market overview
Despite an increase in the rate of new COVID-19 globally, share markets across the world showed further signs of a recovery in delivering their third consecutive month of positive returns after their recent COVID-19 lows on 23 March 2020. Going against the global trend, Europe continued to report a decline in the rate of new COVID-19 cases which helped share markets in Germany (DAX) and France (CAC 40) deliver impressive returns of 6.25% and 5.12% respectively. Returns for the FTSE 100 in the UK whilst positive for the month, still underperformed their European peers and ended the month up by only 1.53%.
As parts of the US began relaxing restrictions the country started to experience a resurgence in the number of new COVID-19 cases over the course of June. However, the S&P500 was in part supported by the more than US$ 2 trillion stimulus package announced by the US Government to soften the economic impact of COVID-19.
The Australian share market saw gains comparable to most other global share markets as most sectors remained in positive territory throughout the month, with Energy, Industrial, and Telecommunications being the exceptions, posting returns of -2.12%, -1.57%, and -0.32% respectively. Shares in the Consumer Staples and Consumer Discretionary sectors were aided by a reported surge in retail spending which followed the initial slump in retail spending as COVID-19 restrictions began to take effect.
Australian and global bonds provided returns of 0.24% and 0.15% respectively.
The Australian dollar gained significant ground against the US dollar over the month, ending June at $0.690 compared to $0.652 at the end of May.
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 30/6/2020 | Growth (Cbus MySuper) |
|---|---|
| Australian shares | 23.86% |
| Global market shares | 21.57% |
| Emerging market shares | 5.33% |
| Private equity | 3.01% |
| Alternative growth | 0.95% |
| Infrastructure | 11.44% |
| Property | 11.86% |
| Mid-risk alternatives | 3.95% |
| Fixed interest | 10.12% |
| Cash | 7.91% |
| Growth / Defensive allocation split | 68.34% / 31.66% |
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 30 June 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.