Investment and market updates

Keep up to speed on economic movements that could impact your super investment.

Investment performance update

Hear from Chief Investment Officer Graeme Miller on the latest super returns.


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    Hi, everyone. I'm Graeme Miller, Chief Investment Officer at TelstraSuper, and I'm very pleased to provide this update on the investment performance of TelstraSuper's investment options for the 12-month period to 30 June, 2024. 

    I'm happy to report that it's been another year of positive returns across almost all our investment options. The chart on the screen shows the performance of TelstraSuper's investment options for our accumulation members for the 12-month period. 

    You can see that our Growth investment option earned 9.6%, our Balanced investment option earned 8%, our Moderate option delivered 7%, and our Conservative option earned 4.9% for the year. These returns are net of all investment taxes and investment fees. 

    Turning to our single sector options, we can see that investments in Australian and global shares performed especially well this year. Our Australian Shares option earned 12.4% and our International Shares option earned 15.2%. The Diversified Bonds and Credit option earned 4.7% and the Cash option earned 4.1%. 

    The laggard this year was the Property investment option, which delivered a negative return of -6.6% for the 12-month period. It's been a tough year for commercial property and I'll talk a bit more about that later. 

    Let's now take a look at returns for our RetireAccess Pension members. You'll see that they're similar to the returns for our accumulation members. The Lifestyle Growth investment option earned 9.7%, the Lifestyle Balanced option earned 8.6%, Lifestyle Moderate earned 7.1%, and the Lifestyle Conservative option delivered 4.9%. Our RetireAccess Lifestyle options are designed to have lower volatility than our accumulation options. Also, RetireAccess members don't pay tax on investment earnings, and this explains why RetireAccess returns are different to the accumulation returns. 

    In the single sector options for RetireAccess members, we once again see strong double digit returns in the Australian shares and International shares options, but negative returns for the Property option. 

    We'll now dig a bit deeper into the drivers for this year's investment performance. As I mentioned earlier, the key driver of our strong investment outcomes this year was the performance of global and Australian share markets. 

    I think that there are two key factors that led to the overall strength of share markets over this period. The first factor was the surprising resilience of major economies over the period. Despite higher interest rates and higher inflation, most economies continued to grow in the 12-month period. Unemployment remained low and consumer spending remained buoyant. And contrary to the expectations of many commentators, we have not seen a global recession. So, as a result of this better than expected economic news, share markets have outperformed. 

    The second factor that drove the performance of the US share market in particular is the emergence of artificial intelligence or AI technology. I'm sure that by now many of you have used AI tools such as ChatGPT, and have been impressed by their ability to give human-like responses to all sorts of questions in no time at all. AI has the potential to revolutionize many industries and boost productivity. And over the past year, investors have enthusiastically bid up the prices of computer software and hardware companies that stand to benefit from the widespread adoption of AI. 

    While AI shares have been the main beneficiaries of this investor enthusiasm, it appears that some of this positive sentiment has rubbed off onto the broader share market. So, while shares have had another strong year, unlisted property investments had another disappointing year and we saw further falls in the value of commercial real estate such as office buildings. 

    The factors that weigh down property returns were higher interest rates and softer demand for property. As people have changed their working, shopping, and recreation habits, this has reduced demand for certain types of properties such as offices and shopping centers, and put downward pressure on rents. Like most investments, property tends to be cyclical, and we've certainly been in the down part of that cycle in recent times. But it's important to remember that the current downturn in the office and retail property market was preceded by a period of strong returns. 

    Throughout the year, TelstraSuper's team of investment professionals has monitored economic and financial market conditions and has made adjustments to our investment portfolios along the way to reflect our assessment of risks and opportunities. Like many investors and economic commentators, we started the year with a cautious outlook. We were concerned that higher interest rates would slow down spending and bite into household budgets. We were also concerned about geopolitical pressures initially centered around Russia and China, and subsequently in the Middle East. So, for the first part of the year, our portfolios were somewhat cautiously positioned as we were concerned about exposing our members to excessive risk. 

    As the year progressed and we observed the general resilience of economies, we became progressively less concerned about the prospect of recession. And so, in the second half of the year, we slowly began to adjust our portfolios to be less defensive, and we ended the year with increased allocations to shares. 

    Turning to the outlook for the next financial year, we are currently monitoring three key things. Firstly, we're carefully watching what happens to inflation because inflation outcomes will give us the best clue about how interest rates are likely to move in the next 12 months. Central banks will need to see convincing signs that inflation is reducing before they take steps to reduce interest rates. So far, most central banks are erring on the side of caution and haven't yet started to reduce rates. 

    We're also keeping an eye out for the state of labour markets and economic growth, both in Australia, as well as overseas. We'll be looking to see if consumer spending declines as higher interest rates and other cost of living pressures begin to bite. 

    And finally, we're keeping a sharp eye on geopolitics. With ongoing conflicts in the Middle East and Ukraine, tensions between China and Taiwan and a US presidential election later this year, geopolitical concerns continue to have the potential to move markets. 

    As we do every year, we have recently reviewed the strategic asset allocations or long-term strategic investment mixes for each of our diversified investment options. The strategic asset allocations describe the long-term allocations to the different types of asset classes for each investment option. This year, with effect from 30 June, we made a few changes to these allocations. In summary, for our accumulation members, we've made small increases to exposures to shares and infrastructure and have made corresponding reductions to exposures to unlisted property, alternative debt, fixed interest, and cash. For our RetireAccess members, exposures to shares have increased by two percentage points and exposures to unlisted property and alternative debt have decreased. Please visit our website for further details of our current long-term strategic investment mix. 

    Of course, we'll continue to monitor markets and our team of investment professionals will continue to manage our portfolios actively, remaining alert to both opportunities and risks in markets. 

    At the end of another successful year, I'd like to finish this video by saying thank you for entrusting us with the management of your superannuation savings. It's a great privilege to do so. In the 2024/25 financial year and beyond, we'll aim to continue to invest your savings prudently and skillfully to enhance your financial futures.