Monthly highlights

  • The Growth (Cbus MySuper) option returned 0.16% for the month of November and 12.89% for the 12 months ending 30 November 2021.
  • Australian and Global shares* delivered a return of -0.53% and 3.47% (hedged) respectively for the month of November 2021.
  • The Reserve Bank of Australia left the cash rate unchanged at 0.10% in its meeting on 2 November.  

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

Super Investment Option Performance (crediting rate)

 

  Cash Savings Conservative Conservative Growth* Growth (Cbus MySuper) High Growth
1 month 0.03% 0.56% 0.34% 0.16% 0.04%
FYTD  0.08% 1.03% 1.63% 2.37% 2.95%
1 Year 0.15% 4.49% 8.31% 12.89% 16.22%
5 Years p.a. 1.00% 5.24% n/a 9.47% 11.61%
10 Years p.a. 1.67% 5.97% n/a 10.13% 11.92%
Funds managed ($m) 874.83 1,041.99 797.16 56,014.35 4,545.83

*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 0.03% 0.56% 0.34% 0.19% 0.04%
FYTD  0.08% 1.03% 1.62% 2.39% 2.95%
1 Year 0.16% 4.51% 8.32% 12.76% 16.26%
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) 9.08 16.24 148.32 150.71 23.36

*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% 0.62% 0.34% 0.16% -0.04%
FYTD  0.09% 1.15% 1.84% 2.74% 3.42%
1 Year 0.18% 4.65% 9.23% 14.14% 18.08%
5 Years p.a. 1.25% 5.88% 8.38% 10.54% 12.88%
10 Years p.a. 2.04% 6.75% n/a 11.32% 13.29%
Funds managed ($m) 78.88 592.28 1,871.64 1,307.88 150.91

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

Market overview

Current as at 16 December 2021

Markets have had a volatile month or so in the lead up to Christmas, tussling between uncertainty due to the emergence of the new ‘Omicron’ variant of Covid-19, expectations that central banks may unwind policy support faster than expected, alongside growth rates and earnings that remain robust. 

The discovery of the Omicron variant initially sent shockwaves through financial markets as they grappled with a significant new source of uncertainty. Equity markets fell quite sharply initially; the US S&P 500 declined by around 5% between 23 November and 3 December. However, as fears over the potential severity of the new variant eased markets rebounded. In the US, equity markets at the time of writing are generally back to where they were before the Omicron announcement, while most European and Asian markets have also regained ground but are still modestly lower.

Undoubtedly, the Omicron variant poses a risk to global growth over the next few months, especially with the Northern hemisphere heading into winter. Thankfully, early indications are that the existing vaccines do provide some protection against it, and it is also likely that Omicron-specific vaccines will begin to be rolled out within a few months. As the World is increasingly adapting to living with the virus, it has also been the case that each successive wave has had a smaller impact on the economy and on financial markets.

So despite the potential for short-term disruption and ongoing risk from the pandemic, the global economy is expected to continue growing strongly in 2022. Activity should be supported by further reopening (e.g. of international travel) and the fact that, through much of the developed world, households have accumulated a large amount of savings during the pandemic. Many have also benefited from rising house prices and share markets.

However, strong growth is starting to generate additional inflation pressures, something that has been exacerbated by pandemic-related disruptions to supply chains and extremely high demand for household goods. The combination of strong growth and higher inflation has seen most central banks around the world begin to remove some of the emergency stimulus that has been in place – or to tighten policy settings outright. During December, the US Federal Reserve further slowed the pace of its asset purchase programme (which buys bonds in an effort to push down longer-term interest rates), and indicated that multiple interest rate rises are likely in 2022. The Reserve Bank of Australia also indicated that its asset purchase programme will likely end early in 2022, although outright rate increases may be further away. Other central banks have already started lifting interest rates, including the Reserve Bank of New Zealand and, in December, the Bank of England. The notable exception is China, where policymakers are loosening policy in response to softer growth readings, largely driven by a slowing property sector and the ongoing adherence to a ‘zero-covid’ policy.

Aside from the virus itself, the pace at which central banks tighten policy over the next few years (and its ultimate impact on the economy) is the other key uncertainty that markets are currently grappling with. Modestly higher interest rates and robust economic growth should still be a favourable environment for equity markets, although we are likely to see increased volatility and more modest gains. But should high inflation force central banks to tighten policy more aggressively, then markets could be in for a trickier ride. 

Asset allocation

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

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

 

Actual allocation 30/11/2021 Growth (Cbus MySuper)
Australian shares 23.17%
Global shares 25.80%
Emerging market shares 5.40%
Private equity 2.44%
Alternative growth 1.80%
Infrastructure 11.32%
Property 11.23%
Global Credit 7.30%
Fixed interest 6.47%
Cash 5.06%
Growth / Defensive allocation split 73.54% / 26.46%

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.