Investment update: 2019/20 performance
September 1st, 2020
Following months of extreme global share market volatility, First Super’s investment options, except the cash options, achieved negative earnings for the 2019/20 financial year.
The Fund’s default Balanced option for accumulation members delivered an annual return of -0.95%, and the Balanced pension option returned -1.19%.
The performance tables for all five investment options for the accumulation and pension funds are provided below.
The result reflects a tough 12 months for both superannuation and the economy generally, as the world dealt with the fall-out of the coronavirus pandemic. While in Australia, our share markets felt the effects of drought and bush fires.
Despite these disappointing returns, First Super delivered a result that placed us in the top 25% of all super funds nationally.
First Super CEO Bill Watson said: “The independent ratings agency, SuperRatings, assessed our performance relative to the default options of other super funds as ‘satisfactory’.
“The best 25% (top quarter) of super funds returned an average of -1.76%, while the bottom 25% returned an average of -5.02%.
“That’s how tough a year it’s been for investment performance for all super funds,” he added.
First Super’s investment returns for the 2019/20 financial year
| Super (Accumulation) Fund | 2019/20 financial year |
| Balanced (Default) | -0.95% |
| Cash | 1.35% |
| Shares Plus | -2.37% |
| Conservative Balanced | -0.43% |
| Growth | -1.69% |
| Pension Fund | 2019/20 financial year |
| Balanced (Default) | -1.19% |
| Cash | 1.60% |
| Shares Plus | -2.33% |
| Conservative Balanced | -0.24% |
| Growth | -1.60% |
A long-term outlook
Even with the 2019/20 results factored in, the Fund’s Balanced option, in which most members are invested, has achieved a strong long-term performance of 7.61% over 10 years. For the Pension Balanced option, the 10-year rolling average is 8.25%.
And while share market uncertainty looks likely to continue for the near future, it’s important to remember that super accounts are designed to weather short-term setbacks.
“Our job is to protect and grow your retirement savings over the long term,” said Bill Watson. “Volatility is completely normal in investment markets and that is why we take a long-term view of investing.”
We are continuing to see share market volatility while the coronavirus pandemic disrupts economies around the world and, therefore, the returns of super fund investments.
Other global economic factors that may influence investment markets in the months ahead are the continuing trade hostilities between the United States and China, and the outcome of the US presidential election.
Our Fund Managers now hope and expect future policy stability in superannuation as Australia and our economy slowly recovers from the extraordinary events of 2020.
We’re here to help
It can be tempting to try and time the market during periods of volatility by switching investment options, but this is difficult to do and potentially costly. If you have queries about your super you can talk to our Member Services Team on 1300 360 988, or you may find it helpful to book a call back with a Financial Planner to discuss your investment strategy.
More information
First Super CEO Bill Watson provides a rundown on the Fund’s performance over the past financial year and what to expect next in our Investment Update video.
To see all of First Super’s crediting rates (investment returns) for 2019/20, and the average crediting rates for prior periods, visit our Investment Returns and Crediting Rates webpage.