Media Super’s Balanced (MySuper) option returned 9.15% in 2014-15.
Within the Balanced option, our target is to invest just over half of funds in the equity market, including investments in both the Australian and international markets. As such, the performance of equity markets, both at home and abroad, is important to the overall performance of the Balanced option.
Our share portfolio is focused on developed markets – such as Australia, the United States, United Kingdom and Europe – with only a small proportion of funds invested in emerging markets, such as China and India.
Equities in developed markets were the standout performer for the 2014-15 financial year. European equities were particularly strong, outperforming US equities. This is due to quantitative easing programs starting in Europe while they were ending in the US.
With a few exceptions, emerging markets didn’t have as strong a year. China was a standout among the emerging markets, due to very supportive Chinese government policies.
Australian equities came in third, with mid-single digit returns, which were almost entirely driven by dividend income.
We aim to invest approximately 15 per cent of Balanced funds into fixed interest securities (commonly known as ‘Bonds’). While performance improved over the course of the year, it was a volatile year for bonds.
Global and Australian bonds generated similar returns to Australian equities in 2014/15. The strongest returns were provided by government, emerging market and inflation-linked bonds.
The global financial community searched for assets with higher yields (in comparison to government bonds), evidenced by the transactional volume in property and infrastructure continuing in an upward trend.
The demand for our unlisted assets is positive, with these making up around 20 per cent of investments for the Balanced option.
We observed some short-term fluctuations as a result of a number of issues. The economic situation in Greece received the most attention in the global media towards the end of 2014/15. As we discussed at the time, the situation in Greece had been one that had developed over a number of years, rather than being a sudden crisis.
Fluctuations are inherent to financial markets and a natural part of investing. The size and impact of short-term market fluctuations varies but they are just that – short-term. It’s important to remember that super is a long-term investment and we take a long-term view to your asset growth.
We understand that everybody’s situation is different and if you’re concerned with the possible effect of short term fluctuations on your super or pension, our team is always here to answer your questions and provide advice.
* Historical returns before 1 July 2008 are based on former Print Super investment returns.
Investment warning: Investment returns are not guaranteed and past performance gives no indication of future returns.