Market update

ESSSuper - 13 Dec 2018

Leroy D'Souza, Senior Investments Analyst, takes the opportunity to review recent market activity and the Fund’s performance.

Market update: 

Global financial markets experienced increased volatility in October 2018 with a significant sell-off in equity markets following strong performance leading up to September 2018. September 2018 saw US equity markets continue to perform strongly despite Trump’s confrontational stance on trade. The unemployment rate in the US fell to a 49-year low of 3.7% and wage growth increased to an annualised rate of 2.9%, the highest since 2009. However, growth across other major markets was weaker, particularly the UK which was negatively impacted by uncertainty around the UK’s exit from the European Union.

Equity markets declined by close to 7% during October. The size of the decline is not unusual in a historical context, especially following very strong equity market performance over recent years.

The economic environment remains supportive globally, with a large number of S&P 500 companies reporting greater than expected earnings in the recent reporting season. However, the Eurozone and China have begun to show signs of slowing economic growth.

The RBA maintained the cash rate in Australia at 1.5% at its latest monetary policy meeting, supporting Australian economic growth.

Performance:

Returns were negative for most of ESSSuper’s Investment Options during October 2018, driven by the sell-off in equity markets. Our downside protection focus helped to minimise the impact of falling markets on our members, with most of our Investment Options outperforming the median SuperRatings¹ peer fund.

ESSSuper Accumulation Plan Investment Option Performance
for the month of October 2018 (net of tax, net-of-fees)

1. SuperRatings October 2018 Accumulation Fund Crediting Rate Survey.

Investment returns cannot be guaranteed as investment markets can be volatile. As a consequence, returns can be positive or negative. Past investment performance is not a reliable indicator of future performance.
Benefits in ESSSuper’s Accumulation Plan, Income Streams and Beneficiary Account products are not guaranteed or underwritten by the Victorian Government or ESSSuper, and ESSSuper does not come under the jurisdiction of the Superannuation Complaints Tribunal.