Investment update – December 2022 quarter
Key highlights
- Most asset classes delivered positive returns over the quarter on signs that inflation is cooling
- US inflation has begun to fall, and Australian inflation appears to be close to its peak
- International Shares returned 5.5%, while Australian Shares returned 9.1%
- Australian and global Bonds returned 0.4% and 0.7%, respectively
- My GESB Super plan returned 4.26% for the quarter
- My West State Super plan returned 3.82% for the quarter
- RI Allocated Pension Conservative plan returned 2.58% for the quarter
Investment market returns: short and medium term
Share, Property and Bond returns were mixed over the past three years and negative over the past year. Recent returns have improved, particularly for Shares and Property. Cash has generated low but positive returns over the time periods shown.
What were the main reasons for recent investment market returns?
- Elevated but peaking inflation
Consumer spending continues to exceed expectations and is maintaining pressure on the price of most goods and services. However, US inflation has begun to fall, and Australian inflation appears to be close to its peak.
- Rising interest rates
Central banks are fighting inflation with further interest rate rises, despite a slowing of global economic growth.
In Australia, the Reserve Bank of Australia (RBA) ended the year with a December rate hike, raising the cash rate by 0.25% to 3.10%. The RBA stated that further rate hikes should be expected while inflation remains elevated and parts of the economy are overheated.
The US Federal Reserve ended the year by raising its target cash rate range by 0.5% to a 15-year high of 4.25% to 4.50%. The Federal Reserve noted it would need to see substantially more evidence of easing inflation before they are confident that pricing pressures are being managed effectively.
Rising interest rates continue to negatively impact investment returns of most asset classes.
Geopolitical tensions
The Russia-Ukraine conflict and the tensions between China and the US over Taiwan are contributing to market volatility as investors worry about the potential impact on global trade.
Investment market returns: long term
Over the longer term (10 years), investments such as Shares and Property have produced the highest returns (but with greater variability), while Cash has delivered the lowest (but most stable) returns. This is illustrated in the chart below.
What does this mean for your investment?
Performance of asset classes
The graph below shows the returns we achieved in each asset class, compared to the benchmark return over the year to 31 December 2022.
As shown in the above graph, we have performed above benchmark in most asset classes over the past 12 months.
Performance of investment options
Investment returns over both the short and long term for some of our diversified plans are shown in the table below. You can also see the investment return history for all of our available plans.
Dec quarter 2022 | 1 year | 3 years | 5 years | 10 years | |
---|---|---|---|---|---|
RI Allocated Pension Conservative plan1 | 2.58% | -5.15% | 0.87% | 2.56% | 4.32% |
Transition to Retirement Pension Balanced plan2 | 3.62% | -5.40% | 2.62% | 4.25% | - |
RI Allocated Pension Balanced plan1 | 4.14% | -6.16% | 2.77% | 4.60% | 6.95% |
RI Term Allocated Pension Balanced plan1 | 4.15% | -6.16% | 2.79% | 4.63% | 6.88% |
My West State Super3 | 3.82% | -7.49% | 2.40% | 4.35% | 6.83% |
My GESB Super1 | 4.26% | -5.92% | 2.99% | 4.58% | 6.89% |
West State Super Growth plan3 | 5.22% | -8.03% | 3.26% | 5.05% | 7.80% |
Returns greater than one year are annualised.
Performance over the quarter was supported by positive returns from Australian Shares, International Shares, and Global Listed Property. Although our diversified plans have experienced negative returns over the past 12 months, performance over the past five and 10 years remains positive.
Related information
Top tips for Investing during market volatility
Find out moreWhether you’re an experienced investor or just starting to learn more, a downturn in the market can be stressful. The good news is that history has generally shown that these downturns come and go and markets generally rebound over time.
Make sure your investment plan is right for you
Find out moreNot sure which investment plan is best? By answering a few questions, our Selecting your investment plan tool will help you to determine the investment plan that best suits your needs.
How to manage your income payments in an uncertain market
Find out moreYou can expect market downturns with any long-term investment, including your super. Here are some ways you could help protect your retirement savings.
More information
- Find out more about investing with us
- See our super investment options or retirement investment options
- Download a PDF printable copy of our Investment update - December 2022 quarter
Need help
- Investment FAQ's
- Find a personal financial adviser
- Call us on 13 43 72
1 Returns are reported net of fees and taxes.
2 Transition to Retirement Pension was incepted on 15 June 2017, so 10-year returns are not available. Returns are reported net of fees and taxes.
3 Returns are reported net of fees.
Indices: Australian Shares - S&P/ASX 300 Accumulation Index; International Shares - MSCI World ex-Australia Net Total Return Index (50% hedged to AUD); Global Listed Property - FTSE EP/NAR DEV NET HDG AUD; Australian Bonds - Bloomberg AusBond Composite 0+ Yr Index; Global Bonds - Bloomberg Barclays Global-Aggregate Total Return Index Value Hedged AUD; Investment Grade Bonds – 50/50 combination of Australian and International Bonds; Cash - Bloomberg AusBond Bank Bill (BB) Index ; Listed Infrastructure - FT Dev Core Infr 50/50 Hdg; Medium Risk Alternatives - Bloomberg AusBond BB Index + 3.75%pa; Defensive Alternatives - Bloomberg AusBond BB Index + 1.75%pa; Private Equity – Blended Benchmark of Australian and International Shares.
Performance information should be used as a guide only, is of a general nature, and does not constitute legal, taxation, or personal financial advice. The performance of your investment plan is not guaranteed and returns may move up or down depending on factors such as investment market conditions. Past performance should not be relied on as an indication of future performance. In providing this information, we have not considered your personal circumstances including your objectives, financial situation or needs. We are not licensed to provide financial product advice. Before acting or relying on any of the information in this website, you should review your personal circumstances and assess whether the information is appropriate for you. You should read this information in conjunction with other relevant disclosure documents we have prepared and where necessary seek advice specific to your personal circumstances from a qualified financial adviser.
Thank you for printing this page. Remember to come back to gesb.wa.gov.au for the latest information as our content is updated regularly. This information is correct as at 18 April 2024.