Monthly highlights

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 formally known as Growth (Cbus MySuper).
 

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.
 

Pre-mixed options:

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

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.
 

Investment Environment Overview (current as at 19 December 2022)

As 2022 draws to a close, the investment environment remains turbulent. Expectations for central bank policy, inflation, and global economic growth all remain in flux, and this is producing large swings in financial markets. In share markets, the year has been characterised by several episodes of large market declines, interspersed with a number of rallies in which markets have risen quite strongly. But all of these surges have ultimately fizzled out, and each saw a lower peak than the one that came before it.

Most recently, there was a period of solid market gains from mid-October through to the end of November. During that time, the MSCI All Country World Index (ACWI) rose by around 13%. The apparent driver of the move higher was the growing belief that inflation has peaked, in which case central banks may not need to keep raising interest rates so aggressively. Oil prices – a major diver of headline inflation – have generally fallen recently. And core inflation (which excludes food and energy prices) may also have peaked; in the US it slowed from 6.7% year-on-year in September to 6.3% in October and 6.0% in November. This was a slightly faster slowdown than had been anticipated.

At the same time, the pace of central bank interest rate hikes has indeed been slowing a little. The Reserve Bank of Australia (RBA) moved from raising rates by 0.5% per meeting, to 0.25% in October, November and December. And the US Federal Reserve (the Fed) signaled at its early November meeting that it was likely to slow down from its 0.75%-per-meeting pace of tightening. It then followed through at the next meeting in December, raising its policy rate by ‘only’ 0.5%.

However, markets started to slide once again in December as central banks stuck to their ‘hawkish’ rhetoric, emphasising that further interest rate increases are likely in 2023. This included the RBA, which noted that it, “expects to increase interest rates further over the period ahead”. The Fed also increased its projection for interest rates at its final meeting of the year, acknowledging that higher rates and slower growth are likely necessary to bring inflation back to target. As markets digested these messages, the MSCI ACWI fell by 4.5% over the first two and a half weeks of December, leaving the index 15.6% below where it started 2022 (as at the time of writing on 16 December).

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 (MySuper) option is shown below.

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.