Investment update – September quarter 2024

Here’s a summary of what’s been happening in the investment world and how it affects your superannuation (your retirement savings).

Inflation is being reigned in

Central banks in different countries have been working to control inflation (the rise in prices). Their efforts are starting to work in some countries, keeping inflation within a safe range without hurting economic growth.

• The UK was the first to lower interest rates.
• The US also cut interest rates more than expected, and the financial markets think they will keep lowering rates in the rest of 2024 and into 2025.
• Australia has kept interest rates steady for several months, and people expect the Reserve Bank of Australia (RBA) will wait until next year to lower them.
• China is trying to boost its economy with special measures, though some experts think they aren’t doing enough to encourage people to spend.

How the markets moved

The financial markets saw big ups and downs this quarter.

• Japan’s share market dropped 20%, then bounced back 10%, mostly due to two interest rate rises in a row.
• The US share market fell, especially in the technology sector, because of weaker-than-expected profits from companies and bad economic news, like high unemployment. But when the US Federal Reserve cut interest rates more than expected, the market reacted positively.
• China’s boost from special economic packages meant emerging markets did well. However, Japan’s stock market struggled, and Europe had little growth.
• Australia had a strong start to the quarter, but the market fell sharply in August before bouncing back to end the quarter higher than July’s peak.
• The Australian dollar also did well against the US dollar, reaching its highest point at the end of the quarter.

How your super is performing

Australian shares did well this quarter, which helped your superannuation grow.

The following areas didn’t do as well as expected, although still delivered positive returns:

• Australian Private Equity
• Australian Infrastructure
• International Infrastructure
• International Shares (Hedged)

Looking ahead, will interest rates drop?

Interest rates are a big topic right now. Elections, like the recent US one, can cause uncertainty in the markets. Once the result is clear, things usually settle down and markets react positively.

What will happen now that Donald Trump has been re-elected? It could mean growth for the US but could also lead to higher costs for other countries because of tariffs (taxes on goods between countries). This could make inflation go up again, which might push interest rates higher.

The re-elected US President will take office in January 2025, and the financial markets will be watching carefully to see what policies he introduces and how they could affect the global economy.

We’re here to help

If you have any questions about your super or want to change how your money is invested, we’re here to help. Contact our Member Services Team at 1300 360 988 or email mail@firstsuper.com.au.

For more updates, visit our Investment Updates and Investment Performance pages.

Disclaimer

Issued by First Super Pty Limited (ABN 42 053 498 472, AFSL 223988) as Trustee of First Super (ABN 56 286 625 181).

Past returns are not an indicator of future returns.

This article contacts general advice which has been prepared without taking into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you or read the Product Disclosure Statement (PDS) before making any investment decisions. To obtain a copy of the PDS or Target Market Determination, please contact First Super on 1300 360 988 or visit our website at firstsuper.com.au/pds.