Whilst it is hard to ignore the ongoing weakness in global and local share markets it is important to remember super is a long term investment and extended periods of volatility can be expected to occur from time to time.  History shows that it generally pays to stay focused on your long-term goals, even in retirement.

Whilst the size of the recent fall means that all investment options that hold shares are negatively impacted, it is important for you to know that ESSSuper is thinking about the risks and proactively managing your super. Importantly, the Fund has a strategy to diversify our portfolios by investing in other growth assets (not just shares), and to some extent this will help protect your investments with us.

Further to this, the Board took the decision to adjust foreign currency holdings against the US dollar. This decision has helped limit the fall in value of our overseas investments as the Australian dollar has fallen in value.

Why is this happening?

Renewed tension in Europe and ongoing concerns about the global economy are the main reasons for the market weakness as investor seek safe havens.

However, it is important to realise that Central Banks are acting to try and address these issues leaving interest rates unchanged and adding to liquidity. Whilst concerns still remain for the banking system and peripheral Europe (i.e. Portugal, Ireland, Greece & Spain), core European economies such as Germany are more robust, benefiting from low interest and exchange rates.

Economic data remains mixed, and despite strong corporate balance sheets and company earning data, both consumers and markets remain nervous, with the latter,hoping further stimulatory support will be announced by the USA’s Federal Reserve.
In Australia there is continued demand for our exports and our relatively high interest rates means that the Reserve Bank has ability to lower interest rates should there be a requirement to stimulate the economy.

Who can I speak to about this?

Our Member Contact Centre is open Monday to Friday, 8.30am to 5.00pm, and we encourage you to call and ask to speak with one of our Consultants.  They can talk you through the current situation and any other super queries you may have. 

If you wish to make an appointment or simply have a chat with one of our Consultants, call the Member Contact Centre on:

• 1300 650 161 (for emergency services members), or
• 1300 655 476 (for state super members).

5 October 2011

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