Monthly highlights

  • The Growth (Cbus MySuper) option returned 1.93% for the month of May and 1.91% for the 12 months ending 31 May 2020.
  • May saw share markets gain ground for the second consecutive month after their recent lows due to COVID-19 with Australian and Global share markets delivering returns of 4.58% and 4.23% respectively.
  • The Reserve Bank of Australia left the cash rate unchanged at 0.25% in its meeting on 2 June.

*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 May 2020 and was reported on 19 June 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 0.02% 0.82% 1.44% 1.93% 2.99%
FYTD 0.73% 1.99% 0.81% -0.85% -1.53%
1 year 0.84% 3.49% 3.00% 1.91% 2.01%
5 years p.a. 1.48% 4.70% n/a 6.44% 6.94%
10 years p.a. 2.27% 5.95% n/a 8.35% 9.01%
Funds managed ($m) 1,909.03 1,109.84 453.33 43,350.35 2,569.27

*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
0.02% 0.82% 1.47% 2.00% 2.99%
FYTD 0.77% 2.04% 0.89% -0.55% -1.47%
1 year
0.89% 3.55% 3.09% 2.34% 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) 26.00 29.23 174.34 150.85 23.28

*These options commenced on 1 July 2017. 

Fully Retired Option Performance (crediting rate)

 

  Cash Savings Conservative Conservative Growth* Growth High Growth
1 month 0.03% 1.04% 1.71% 2.45% 3.65%
FYTD 0.92% 2.37% 1.32% -0.62% -1.90%
1 year 1.06% 4.11% 3.84% 2.53% 1.94%
5 year p.a 1.85% 5.41% 6.65% 7.38% 7.77%
10 year p.a 2.75% 6.72% n/a 9.36% 10.03%
Funds managed ($m) 272.03 566.66 1,235.96 865.44 76.72

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

 

Market overview

The recovery started in April extended into May as the continued decrease in the rate of new COVID-19 cases showed signs of further potential improvement in containing the spread of the virus. Despite the high number of COVID-19 cases in the US relative to their global peers, the S&P 500 index climbed 4.53% over the month. Returns from the UK and French share markets were not as strong compared to those from US markets with the FTSE 100 ending May up by 2.97% and the CAC 40 only gaining 2.70%. The German share market was the best performer in the EU with a return of 6.68%. The only major share market to lose ground in May was China’s Shanghai Composite index with a loss of -0.27% on mounting concerns that COVID-19 was not as well contained as previously reported.

The Australian share market saw gains comparable to most other global share markets with most sectors delivering positive returns with the exceptions being Healthcare and Consumer Staples which fell by -5.10% and -0.49% respectively. Information Technology continued to be the best performing sector in the Australian share market, adding to the returns in April of 21.84% by gaining a further 14.31% over the course of May. The next best performing sectors rose by more than 8% with Materials and Telecommunication Services gaining 8.39% and 8.52% respectively.

Australian and global bonds provided returns of 0.21% and 0.23% respectively.

The Australian dollar gained ground against the US dollar over the month, going from $0.631 in April to $0.652 by 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:

Super Options

Transition to Retirement Options

Fully Retired Options

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

 

Actual allocation 31/5/2020 Growth (Cbus MySuper)
Australian shares 25.79%
Global shares 19.57%
Emerging market shares 5.21%
Private equity 3.05%
Alternative growth 0.89%
Infrastructure 11.70%
Property 12.06%
Mid-risk alternatives 3.95%
Fixed interest 10.24%
Cash 7.55%
Growth / Defensive allocation split 68.36% / 31.64%  

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 May 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.