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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 -9.39% for the month of March and -2.52% for the 12 months ending 31 March 2020.
- COVID-19 continued to impact share markets as Australian and Global shares dropped -20.83% and -13.38% respectively over the month.
- In March, the Reserve Bank of Australia cut the cash rate twice, the first cut of -0.25% during their monthly meeting on 3 March, and then through a mid-cycle rate cut on 20 March leaving the cash rate down -0.50% at 0.25% by the end of March.
*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 March 2020 and was reported on 21 April 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% | -3.41% | -6.35% | -9.39% | -12.54% |
| FYTD | 0.67% | -0.23% | -3.09% | -5.96% | -9.47% |
| 1 year | 1.06% | 2.41% | 0.02% | -2.52% | -5.59% |
| 5 years p.a. | 1.53% | 4.35% | n/a | 5.55% | 5.39% |
| 10 years p.a. | 2.32% | 5.74% | n/a | 7.51% | 7.60% |
| Funds managed ($m) | 2,198.12 | 1,115.37 | 365.68 | 41,009.66 | 2,215.06 |
*The Conservative Growth accumulation option commenced on 6 July 2017.
Transition to Retirement Option Performance (crediting rate)
| Cash Savings* | Conservative* | Conservative Growth* | Growth* |
High Growth* |
|
|---|---|---|---|---|---|
| 1 month |
0.08% | -3.41% | -6.37% | -9.24% | -12.52% |
| FYTD | 0.71% | -0.18% | -3.06% | -5.92% | -9.42% |
| 1 year |
1.12% | 2.47% | 0.07% | -2.36% | -5.51% |
| 5 years p.a. |
n/a | n/a | n/a | n/a | n/a |
| 10 years p.a. |
n/a | n/a | n/a | n/a | n/a |
| Funds managed ($m) | 29.86 | 26.40 | 169.51 | 146.27 | 20.51 |
*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% | -3.90% | -6.95% | -10.46% | -14.26% |
| FYTD | 0.85% | -0.28% | -3.13% | -6.88% | -11.09% |
| 1 year | 1.35% | 2.64% | 0.40% | -3.04% | -6.83% |
| 5 year p.a | 1.92% | 4.95% | 5.88% | 6.23% | 5.91% |
| 10 year p.a | 2.81% | 6.44% | n/a | 8.35% | 8.41% |
| Funds managed ($m) | 334.15 | 534.87 | 1,148.08 | 809.56 | 61.43 |
**The Conservative Growth Income Stream option commenced on 1 December 2013.
Market overview
Global share markets continued to experience significant declines in March as the impact of government-imposed trade and travel restrictions started to be felt across the world, leading to high levels of unemployment and increased concerns over the potential longer-term impact this would have on global growth. These measures; combined with the lack of certainty around how long they’ll be in place meant share markets in Europe continue to lose ground with the UK’s FTSE 100 losing -13.81%, the Dax in Germany -16.44%, and the CAC 40 in France down -17.21%. Share markets in the US posted similar losses as the country following a substantial spike in the number of confirmed cases of COVID-19, seeing the S&P500 end the month lower by -12.51%.
As with the rest of the world, Australian shares continued to fall for a second consecutive month, pushing their returns for this financial year into negative territory. All sectors in the Australian share market lost ground over the month with shares in the Energy and Technology sectors remaining the most affected after falling -17.42% and 16.31% respectively. The best performing sectors did not manage to escape unscathed with Financials declining -4.92%, Healthcare by -3.95% and Utilities at -3.96%.
Australian and global bonds provided returns of 0.00% and 1.47% respectively as the recent uncertainty incentivised investors to move into these more defensive assets.
The Australian dollar continued to lose ground against the US dollar, finishing March lower by -6.9% at $0.620 compared to $0.666 at the end of February.
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 31/3/2020 | Growth (Cbus MySuper) |
|---|---|
| Australian shares | 22.67% |
| Global shares | 20.02% |
| Emerging market shares | 5.27% |
| Private equity | 2.86% |
| Alternative growth | 1.12% |
| Infrastructure | 11.96% |
| Property | 12.56% |
| Mid-risk alternatives | 4.61% |
| Fixed interest | 9.08% |
| Cash | 9.85% |
| Growth / Defensive allocation split | 66.51% / 33.49% |
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 March 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.