Investment
21 June, 2023

Market update - June

It continues to be a busy time in financial markets. With the end of the financial year fast approaching, Deputy Chief Investments Officer Phil Naylor is here to update you on recent market developments and our investment options.

Inflation and interest rates still the focus

Inflation, often measured by the consumer price index (or ‘CPI’), is a key issue facing households and financial markets. 

The sharp rise in inflation that emerged during the COVID-19 pandemic was a key reason central banks started to aggressively lift interest rates. 

The good news is there are signs that inflation pressures in some regions may be receding, particularly in the US and Europe.

2023InflationGraph

Despite this recent reversal, inflation remains uncomfortably high for central banks, which have continued raising interest rates. 

Here in Australia, CPI is around 7%, with the Reserve Bank of Australia (RBA) lifting the cash rate from near zero to 4.10% in June.

2023CashRateGraph

Equities proving resilient

For financial markets, ongoing concerns that inflation may remain ‘sticky’ and tightening of monetary policy is a headwind for assets such as shares and bonds. 

Despite this, equities have proved resilient, with many stock markets now broadly flat in performance over a 12-month period — a stark improvement on last year. 

2023GlobalEquityGraph

Factors supporting equities include the reopening of China’s economy, ongoing robustness in economic growth, and hopes that the subsiding inflation may mean central banks will soon have to reverse course and begin cutting rates.

 

Our performance

We are pleased that we have continued well managing our investment options through this challenging market period. All our pre-mixed investment options show positive returns over a 1 and 3-year period as at the end of April 2023. 

Pre-mixed options     

Risk level   

One-year average return pa

Three-year average return pa 

Sustainable

Medium to high

3.74%

7.53%

Moderate

Medium

3.59%

5.25%

Growth

High

4.96%

10.09%

Conservative

Low to medium

3.04%

3.82%

Balanced (MySuper)

Medium to high

3.86%

7.91%

We also remain committed to finding great long-term investment opportunities that will continue to put us in good stead in the face of ongoing financial market and economic challenges in the future. 

A good example is our recent purchase of a 30% stake in the Port of Geelong, which was finalised in early May. 

Critical infrastructure investments such as these provide attractive long-term returns prospects, help buoy our portfolios to factors such as rising inflation and are an example of our commitment to helping support economic growth in our regions. 

We have no doubt it will offer great value to members for many years.

 

Join our Investment update 2022-23 webinar

For an in-depth update on your super performance, tune into one of our two Investment Update 2022-23 webinars on 8 August 2023.

Hear straight from our Chief Investment Officer, Dr Ross Barry, about the impact markets and the economy have had on your super over the last 12 months.

For more details and to register, see events and workshops.