Investment Performance Highlights – 29 May 2020
Daniel Selioutine, Head of Investments, takes the opportunity to review market activity and the Fund’s performance in light of recent events.
Financial markets regained some early confidence this week as no negative news was perceived as good news by equity markets. Early indicators of economic activity continued to show very gradual signs of recovery, particularly in Europe and Asia. The U.S. appears to have successfully slowed the growth rate of new Coronavirus cases however the number of new daily cases remains elevated. Emerging market economies continue to exhibit rapid growth in new infections, adding to the number of cases globally.
The risk of new infections that are unable to be contained remains a key risk for growth assets. Investors are likely to become increasingly confident as time passes and governments show a consistent ability to identify and quarantine new infections.
ASSET CLASS RETURNS
Australian equity markets (S&P / ASX 200) returned 5.1% this week and 1.8% last week. The U.S. equity market (S&P 500 in US dollars) gained 2.7% this week and 3.3% last week. Sovereign bonds (Bloomberg AusBond Composite 0+ Year Index) was flat this week after gaining 0.2% last week.
WHAT DOES THIS MEAN FOR YOU?
If you're a Defined Benefit member:
- If your super is invested in the Emergency Services Superannuation Defined Benefit Fund or the State Superannuation Defined Benefit Fund, then your entitlements are guaranteed by the Victorian State Government. Recent equity market declines will not impact your ESSSuper retirement savings.
If you are an Accumulation Plan or Income Stream member:
- It is important to remember that superannuation is a long-term investment, which includes peaks and troughs along the way. Over the longer term, our Accumulation Plan and Income Stream Investment Options have continued to meet their return objectives. Historically, periods of negative returns are usually followed by longer periods of strong returns.
If you're nearing retirement or already retired:
- There are things to consider if you’re thinking about switching your investment options.
Switching Investment Options to lower risk Options may inadvertently lock-in investment losses and miss out on the potential for higher returns by being out of the market when it recovers. Market downturns, whatever their trigger may be, are inevitable and temporary. Every crisis, downturn, and recession comes to an end. And it is very likely that this crisis will be no different.
We're here to help
Our aim is to help every member achieve a comfortable and financially secure life in retirement through investment options that meet their retirement objectives over the long-term. We have a range of foundational principles that we adhere to when it comes to making these decisions. To learn more about how our investment approach works, click here.
Before you make any change to your super investment strategy, we encourage you to speak to an ESSSuper financial adviser, to book an appointment please call us on 1300 650 161 or email us at email@example.com