Investment update – September 2023 quarter

Key highlights

• Shares posted negative returns over the September 2023 quarter following strong gains in the first half of 2023
• International Shares fell 1.6%, while Australian shares declined by 0.8%
• Bonds also declined, with higher than expected interest rates having a negative impact on returns
• Australian bonds were down 0.3% and global bonds dropped 2.5%
• My GESB Super returned -0.83%; My West State Super returned -0.88%; and RI Allocated Pension Conservative returned -0.13%

What were the main reasons for recent investment market returns?

• Interest rates – higher for longer
  Investment markets priced in expectations that interest rates would remain higher for longer on stronger economic growth and employment in the United States.

• Financial market headwinds
  Rising energy prices, the weak economic recovery in Europe and concerns on the financial viability of Chinese property developers put downward pressure on shares.

• Central bank actions
  The US Federal Reserve and the European Central Bank (ECB) raised their official cash rates by 0.25% in July. The ECB raised the official cash rate again in September with the intention of guiding inflation back to its target. The US Federal Reserve and the Bank of England, as well as the Reserve Bank of Australia, kept rates unchanged in September.

As shown in the above graph, we have performed above benchmark in most asset classes over the past three years.

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.

Investment plan returns

Returns greater than one year are annualised.

Despite market volatility in recent times, our diversified plans have delivered sound returns over the long term.

1 Returns are reported net of fees and taxes.
2 Transition to Retirement Pension was incepted on 15 June 2017, so longer-term 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 Index (50% hedged to AUD, 50% unhedged); 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.