Investment Update

Since the beginning of this year, financial markets have been very volatile. Share prices have fallen and interest rates have risen. As a result, the value of many bonds have fallen.

In the US, share prices have had a rocky ride.

US Share prices over the past four weeks (to 20/2/2022) (SPX/S&P 500)

Source: CNBC Markets

Source: CNBC Markets

In Australia, share markets have also declined, but not by as much as they have overseas.

Australian Share prices over the past four weeks (to 23/2/2022) (ASX200)

Source: CNBC Markets

Source: CNBC Markets

Technology stocks (for example, Facebook and Google) have fallen more than the broad American market (NASDAQ) in January. As the world begins to recover from COVID-19, there are increasing concerns around inflation with prices rising faster than they have for many years. Many companies are reporting that their expenses have increased, leading to margin deterioration. One worry for markets, especially in the US is that the Fed may need to increase interest rates to tackle ongoing American inflation. Additionally, concerns around Russia’s intent around Ukraine is weighing on the market.

The ongoing fall in the price of equities and bonds means that account balances in super will have fallen over the past month. This is a situation affecting many Australian superannuation organisations.

At Australian Catholic Superannuation (Fund), we have taken defensive action in advance of the recent fall. The Fund has held less bonds and less technology stocks than other superannuation funds, which has assisted in buffering losses across our options.

The above has assisted in the Fund protecting member savings from further falls.

Below, the Fund’s January investment returns are compared to the median returns* according to independent ratings house SuperRatings.

Option (pension) Australian Catholic Superannuation in January 2022 Median fund in January 2022 
Australian Shares -5.39%  -5.87% 
International Shares  -1.74%  -2.99% 
Growth  -2.24%  -3.41% 
Balanced  -1.87%  -2.79% 
Conservative Balanced  -1.42%  -2.02% 
Conservative  -0.93%  -1.32% 
Capital Stable  -0.53%  -0.62% 
Bonds  -1.23%  -1.21% 
Property  0.27%  -5.61% 
Cash and Term Deposits  0.00%  0.01% 
Socially Responsible  -4.00%  -2.79% 

Source: SuperRatings Pension Fund Crediting Rate Survey January 2022. The returns above have been taken from SuperRatings. Returns are net of investment fees, tax and implicit asset-based administration fee. Explicit fees such as fixed dollar administration fees are excluded. NB: RetireSmart Growth, RetireSmart Cash, Shares and Credit Income option have not been included as there are no comparable SuperRatings figures.

* The median return across all superannuation funds in each related SuperRatings survey. For example, the Growth median relates to fund returns in the SuperRatings Pension Fund Crediting Rate Survey SRP50 Growth (77-90) Index.

To view all returns across the financial year, and historical returns, click here.

As a valued pension member of the Fund, we encourage you to contact us if you have any concerns.