Monthly highlights

  • The Growth (MySuper) option returned -1.07% for the month of May and 1.31% for the 12 months ending 31 May 2022.
  • Australian and Global shares* delivered a return of -2.76% and -0.18% (hedged) respectively for the month of May 2022.
  • The Reserve Bank of Australia increased the cash rate to 0.35% in its May meeting. 

*ASX 300 Accumulation Index and MSCI ACWI ex Aust Net Divs Custom Tax Hedged to AUD.

Super Investment Option Performance (crediting rate)

Pre-mixed options:

The Conservative Growth accumulation option commenced on 6 July 2017.   Until 14th February 2022, Cash was formally known as Cash Savings, and Growth (MySuper) was formually known as Growth (Cbus MySuper).
 

  High Growth Growth Plus

Growth

(MySuper)

Indexed

Diversified

Conservative

Growth

Conservative
1 month -1.28% -1.18% -1.07% -1.04% -0.89% -0.58%
FYTD  -1.74% -2.30% -0.97% -3.40% -1.96% -2.41%
1 Year 0.88% n/a 1.31% n/a -0.35% -1.32%
5 Years p.a. 8.67% n/a 7.20% n/a n/a 3.67%
10 Years p.a. 11.05% n/a 9.39% n/a n/a 5.22%
Funds managed ($m) 4,639.75 448.68     58,485.26 11.71 849.46 1,213.97

DIY options

The Growth Plus, Indexed Diversified, Overseas Shares, Australian Shares, Property and Diversified Fixed Interest options commenced on 14 February 2022 therefore crediting rate information for longer time periods are not applicable.
 

 

Overseas

Shares

Australian

Shares

Property

Diversified

Fixed Interest

Cash
1 month -1.21% -2.96% -2.67% -0.78% 0.04%
FYTD -9.49% 0.28% 0.83% -3.76% 0.15%
Funds managed ($m) 31.48 148.43 44.99 39.76 1,335.78

Transition to Retirement Option Performance (crediting rate)

Pre-mixed options:

The Conservative Growth option commenced on 1 July 2017.  Until 14th February 2022, Cash was formally known as Cash Savings.
 

  High Growth Growth Plus Growth

Indexed

Diversified

Conservative

Growth

Conservative
1 month -1.29% -1.19% -1.02% -1.08% -0.89% -0.58%
FYTD  -1.78% -3.17% -0.98% -3.35% -1.96% -2.40%
1 Year 0.84% n/a 1.26% n/a -0.36% -1.30%
5 Years p.a. n/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 n/a
Funds managed ($m) 20.79 3.62 181.44 0.01 136.32 19.90

DIY Options:

The Growth Plus, Indexed Diversified, Overseas Shares, Australian Shares, Property and Diversified Fixed Interest options commenced on 14 February 2022 therefore crediting rate information for longer time periods are not applicable.
 

 

Overseas

Shares

Australian

Shares

Property

Diversified

Fixed Interest

Cash
1 month -1.20% -2.96% -2.70% -0.77% 0.04%
FYTD -9.65% 0.35% 0.65% -3.76% 0.15%
Funds managed ($m) 0.47 2.08 0.34 0.68 11.74

Fully Retired Option Performance (crediting rate)

Pre-mixed options:

The Conservative Growth Income Stream option commenced on 1 December 2013.  Until 14th February 2022, Cash was formally known as Cash Savings.
 

  High Growth Growth Plus Growth

Indexed

Diversified

Conservative

Growth

Conservative
1 month -1.56% -1.36% -1.24% -1.04% -1.01% -0.72%
FYTD  -1.38% -2.70% -0.83% -3.59% -1.86% -2.76%
1 Year 1.34% n/a 1.54% n/a -0.15% -1.62%
5 Years p.a. 9.74% n/a 8.12% n/a 6.29% 4.14%
10 Years p.a. 12.30% n/a 10.48% n/a n/a 5.87%
Funds managed ($m) 147.19 24.07 1,620.26 0.29 1,906.35 732.21

DIY options: 

The Growth Plus, Indexed Diversified, Overseas Shares, Australian Shares, Property and Diversified Fixed Interest options commenced on 14 February 2022 therefore crediting rate information for longer time periods are not applicable.
 

 

Overseas

Shares

Australian

Shares

Property

Diversified

Fixed Interest

Cash
1 month -1.35% -3.17% -3.00% -0.90% 0.05%
FYTD -10.57% 0.32% -0.29% -4.39% 0.19%
Funds managed ($m) 2.80 18.18 5.13 16.63 201.27

Market overview

Investment Environment Overview (current as at 4 July 2022)

Market volatility has remained very high over recent weeks, and share markets have generally trended lower as markets grapple with a rapid tightening of monetary policy and signs of slowing economic growth.

Markets had rallied a little during early May, leaving the MSCI All Country World Index (ACWI) roughly unchanged (-0.1%) for the month as a whole. However, there was then a sharp sell-off during the second week of June, and although some of the losses were reversed later in the month, the index ended June 8.6% lower than where it started the month.

The catalyst for the June sell-off was the US CPI inflation report, published on the 10th. Rather than showing the annual rate of inflation slowing in May, as had been expected, it showed a reacceleration to 8.6% y-o-y in headline inflation (the highest in 31 years) and 6.0% in ‘core’ inflation, which excludes food and energy. The strength and breadth of inflation then prompted a 0.75% increase in the Federal Reserve’s interest rate at the US central bank’s meeting the following week. That was despite the Fed Chairman, Jerome Powell, seemingly ruling out such large moves at the prior meeting just six weeks earlier – when the Fed had raised rates by 0.5%.

The Fed is certainly not alone in tightening monetary policy aggressively; recent weeks have also featured 0.5% interest rate increases by the Reserve Bank of Australia, the Bank of Canada and the Reserve Bank of New Zealand. Even the European Central Bank has signalled it will soon begin lifting its policy rate for the first time since 2011.

The worry in financial markets is that these central banks will tighten so aggressively that they push the economy into recession – or, even worse, an environment of ‘stagflation’ in which growth is weak but inflation remains persistently high. For now, overall economic momentum remains solid; the US economy for instance added another 390,000 jobs in May and job vacancies remain around record highs. Australia’s economy is also tracking well, with the unemployment rate at a record low of 3.9%.

However, there are signs of slowing momentum showing up in the data. Timely indicators such as manufacturing PMIs weakened noticeably in June, especially in Europe where high energy costs are impacting both businesses and households. The US ISM manufacturing index (a similar measure to the PMIs) also fell from 56.1 to 53.0 in June, the weakest reading since June 2020. In Australia, higher interest rates are already having an impact on the housing market, where prices have begun to fall following 18 months of strong gains.

Given this backdrop of rising interest rates and slowing economic growth, the investment environment is likely to remain challenging, especially if the global economy does slip into an outright recession. Key to the outlook will be whether and how quickly inflation subsides, as this will determine when central banks will be able to ease off on the pace of interest rate increases. 

 

 

Asset allocation

The Strategic Asset Allocations for all investment options can be found on the following pages:

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

 

Actual allocation 31/05/2022 Growth (MySuper)
Australian shares 22.16%
Global shares 23.37%
Emerging market shares 6.50%
Private equity 2.00%
Alternative growth 1.25%
Infrastructure 12.75%
Property 12.47%
Global Credit 7.51%
Fixed interest 6.87%
Cash 5.13%
Growth / Defensive allocation split 71.63% / 28.37%
   

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 (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.