In July this year, we announced that the retirement savings of AustralianSuper’s more than 2 million members has increased above the $100 billion mark for the first time.
We hit the milestone as a result of strong growth in returns, an increase in members and a strong focus on driving down costs to members.
Chief Executive Ian Silk said it was a major step for members and underlines the strength of the profit to members’ philosophy that underpins the fund’s business model.
“We are very proud of all the work that has been done to try and ensure that members can retire with the biggest possible savings to assist in providing them with an income in retirement for their post-work life.”
“AustralianSuper is also moving to play a bigger role on the global investment stage providing members access to some of the biggest and best deals worldwide”, he added.
It’s the fund’s size and growth that has allowed for a greater focus on direct investment over recent years and meant that members can benefit from increased returns related to major domestic and global deals such as:
- $1.1 billion purchase of a stake in the Ala Moana shopping centre in Hawaii
- $1.3 billion acquisition of 67.5% stake in the King’s Cross development in London
- $5 billion purchase of Port Botany and Port Kembla in NSW
- $7 billion Queensland Motorways deal as a member of the Transurban consortium
End of financial year results remain positive
While it’s been a challenging year in investment markets, AustralianSuper’s Balanced option, which most members invest in, delivered its seventh year in a row of positive returns. Its return of 4.54% for the 2015/16 financial year was well ahead of the median balanced option return of 2.81%, making it one of the top ten performing funds.*
The returns come after three consecutive years of double digit returns, which take the Balanced option’s total return over the past four years to just over 50 per cent.
Chief Investment Officer Mark Delaney said: “Our diversified strategy and active approach are two of the reasons why the Balanced option has performed better than many other similar funds over the financial year and longer term. In recent years we’ve been investing in a range of assets outside the share market, so we can continue to grow your retirement savings across a range of market conditions.”
Investment conditions became more challenging for super funds this year. A number of events like a slower Chinese economy, falling oil prices and more recently the UK’s vote to leave the European Union have caused uncertainty.
Like other super funds, AustralianSuper’s Balanced option has some of its portfolio invested in shares, so movements in sharemarkets can impact returns. For the full year, both Australian and US share markets were slightly positive, while European, Japanese and emerging markets were down. The fund points to its active approach to investing, including which companies, regions and industries to invest in, as being key to the fund’s Australian and international share portfolios outperforming the broader market.
Preparing for the future
AustralianSuper keeps a close eye on world events that are likely to impact members’ future returns, and adjusts the strategy accordingly. We’re also on the lookout for potential opportunities that changes in the investment environment present.
The things that have been supporting the very high investment returns over the previous last three years are changing, so we’re not expecting returns to be as strong as they have been.
It’s not unusual to have periods of lower returns, and periods of higher returns, across the timespan that super is invested. While it might seem difficult, it’s important to stay focused on the end game – the long-term result.
Take a world tour of AustralianSuper’s investments at australiansuper.com/investmentworldtour
* SuperRatings Fund Crediting Rate Survey June 2016 – SR50 Balanced Index.
Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.