Investment update – September 2022 quarter

Key highlights

• Financial markets continued to experience high levels of volatility
• Interest rate rises by major central banks, coupled with the risks of the ongoing Russia-Ukraine war and China-US tensions over Taiwan, had a negative impact on investment market returns
• International Shares fell 3.0%, while Australian Shares added 0.5%
• Australian and global Bonds returned -0.6% and -3.8%, respectively
• My GESB Super plan returned -1.57% for the quarter
• My West State Super plan returned -1.70% for the quarter
• RI Allocated Pension Conservative plan returned -1.01% for the quarter

What were the main reasons for recent investment market returns?

• Consistently high inflation

  Consumer spending continues to exceed expectations and is maintaining pressure on the price of most goods and services. The sanctions imposed on Russia have disrupted global supply chains and contributed to elevated food and energy prices.

• Central banks raising interest rates

  Central banks are fighting inflation with further interest rate rises despite a slowing of global economic growth.

  The Reserve Bank of Australia raised its official cash rate target from 1.50% to 2.35% over the September quarter, due to continuing upward pressure on prices from strong spending and employment. The US central bank also raised its official cash rate target by 1.50% to 3.0-3.25% over the quarter - its fifth rate hike this year.

  Rising interest rates continue to negatively impact investment returns of most asset classes.

• Higher government bond yields

The Australian 10-year bond yield increased from 3.69% to 3.91% while the US 10-year bond yield jumped from 3.02% to 3.83% on higher inflation expectations. This contributed to Australian and global Bonds delivering negative returns for the quarter.

• Geopolitical tensions

The ongoing Russia-Ukraine war and China-US tensions over Taiwan are contributing to market volatility.

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.

Other investment plans: See the investment returns for all of our available plans

Returns greater than one year are annualised.

Performance over the quarter was hindered by negative returns from International Shares, Global Listed Property and Bonds. Although our diversified plans have experienced negative returns over the past 12 months, performance over the past five and 10 years remains positive.

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.