With the recent devastating earthquakes and tsunami’s in Japan being in the forefront of the media it is difficult to ignore the financial ramifications of such a disaster.  However, it is important to monitor events and markets carefully before making financial decisions.  Superannuation is a long term investment and 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.

Japanese markets dropped by 20% in the three business days following Friday’s 8.9 magnitude earthquake; however the Japanese markets have already recovered almost 3.8% of those falls on the following Wednesday.   Australian markets have also recovered a further 0.84% as of Wednesday 16 March 2011. 

ESSSuper’s exposure to Japanese equities is 7% of our global allocation (which is less than the MSCI index of 10%). Even though the ESSSuper investment portfolios’ are well diversified, we are continually monitoring the situation and looking for opportunities. 

Which investment options are impacted?

Our Conservative, Balanced, Growth and High Growth options have between 0.60% and 1.72% exposure to Japanese markets.  Our Shares Only option has 3.78% in Japanese markets. The effect of this exposure and the flow on effects to world markets have naturally effected the ESSSuper investment option returns. Due to diversification and appreciation of other assets, the effect has been limited to between (Conservative) -0.31% and (Shares Only) -2.53%. These figures are true and correct as at COB Tuesday 15 March 2011 (prior to the partial market recovery).

Can I speak with someone about this?

Of course.  Our Member Contact Centre is open Monday to Friday and we encourage you to call and ask to speak with one of our Member Education Consultants.  Our Member Education Consultants can talk you through the current situation and any other super queries you may have.  Please call 1300 650 161 if you wish to make an appointment or simply have a chat with one of our Member Education Consultants.

Is my defined benefit impacted by the markets in Japan?

No.  If you are a member of the Revised Scheme, New Scheme, SERB Scheme, Transport Scheme or ESSS DB then your retirement benefit is not impacted.

Where can I get more information?

We will provide regular updates on our website when appropriate.  Otherwise, please call our Member Contact Centre and ask to speak to a Member Education Consultant.  Please call 1300 650 161.

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