Investments and strategy update

Transcription

1 Investments and strategy update Webinar for registered financial advisers Date: 28 March 2019 Presenter: Stephen Fallet, Manager, Investment Communications

2 This is general information only This information has been prepared for professional financial advisers only and is not suitable for retail clients. It is of a general nature and does not take into account any persons personal objectives, situation or needs. Before making a decision about AustralianSuper, you should consider their financial requirements and read our Product Disclosure Statement, available at australiansuper.com/adviserresources or by calling Adviser Services There are references to performance in this presentation. It is important to note that investment returns are not guaranteed and that past performance is not a reliable indicator of future returns. Returns from equivalent investment options of ARF and STA are used in calculating returns for periods that begin before 1 July AustralianSuper Pty Ltd ABN AFSL Trustee of AustralianSuper ABN

3 Presenter Stephen Fallet As Manager, Investment Communications, Stephen is responsible for monitoring and communicating the strategy and performance of AustralianSuper s PreMixed and DIY single asset class investment options. Stephen joined AustralianSuper in August 2014, bringing with him over 25 years experience in the investment management industry. With a background in economics, Stephen is a Fellow of Finsia (FFIN) and a Certified Investment Management Analyst (CIMA). 3

4 What we re covering today AustralianSuper s recent performance Our take on what s going on in markets Global and domestic economy Future outlook and how we re positioning our portfolios 4

5 December quarter hurt returns for our PreMixed options 1.0% FYTD returns 0.0% -1.0% -0.12% -2.0% -1.43% -3.0% -2.72% -2.96% -2.89% -4.0% -5.0% -4.16% High Growth Balanced Socially Aware Indexed Cons Bal Stable 5 As at 31 December Source: AustralianSuper.

6 It was all about listed equity markets 4.0% FYTD returns 2.63% 2.0% 1.35% 1.03% 0.0% -2.0% -4.0% -6.0% -5.33% -5.20% Australian Shares International Shares Property Diversified Fixed Interest Cash 6 31 December Source: AustralianSuper.

7 Unlisted assets continue to shine Asset class returns Emerging Mkt Equities Developed Mkt Equities Australian Equity Global Bonds Australian Cash Australian Bonds Australian Dollar Property Infrastructure Private Equity -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 5 yrs annualised ending Dec year Dec Source: AustralianSuper.

8 Focussed on delivering investment results Balanced option performance Returns to 31 December 2018 Balanced option Median * Relative Ranking Year % / 50 3 years % pa / 50 5 years % pa / 50 7 years % pa / years % pa / years % pa / years % pa / 19 Source: SuperRatings Fund Crediting Survey December

9 Developed market corrections and bounceback Correction Duration Magnitude 6M Fwd 12M Fwd 24M Fwd (Months) 13/02/ /03/ % 28% 31% 9% 02/05/ /07/ % 18% 34% 100% 17/04/ /08/ % 7% 2% 27% 06/01/ /04/ % 4% 17% 29% 20/07/ /10/ % 33% 36% 44% 28/11/ /03/ % 30% 47% 66% 09/05/ /06/ % 19% 28% 17% 19/07/ /08/ % -2% -9% 28% 15/04/ /07/ % 24% 30% 20% 02/05/ /10/ % 20% 24% 44% 28/10/ /11/ % 8% 19% 48% 19/03/ /06/ % 14% 28% 49% 21/05/ /02/ % 18% 24% 40% Average % 17% 24% 36% Median % 18% 28% 40% Source: Factset, MSCI World (loc). 9

10 What a difference a quarter makes 5.0% FYTD returns 4.0% 3.0% 3.38% 3.52% 2.95% 4.09% 3.30% 3.11% 2.0% 1.0% 0.0% High Growth Balanced Socially Aware Indexed Cons Bal Stable 10 As at 20 March Source: AustralianSuper.

11 Single asset class options have improved 6.0% 5.52% FYTD returns 5.0% 4.0% 3.0% 3.47% 3.24% 2.91% 2.0% 1.46% 1.0% 0.0% Australian Shares International Shares Property Diversified Fixed Interest Cash 11 As at 20 March Source: AustralianSuper.

12 Focussed on delivering investment results Balanced option performance Returns to 28 February 2019 Balanced option Median * Relative Ranking Year % / 50 3 years % pa / 50 5 years % pa / 49 7 years % pa / years % pa / years % pa / years % pa / 19 Source: SuperRatings Fund Crediting Survey February

13 PreMixed options performance Rankings to 28 February year 3 years p.a. 5 years p.a. 10 years p.a. High Growth 25 / 49 7 / 49 2 / / 44 Balanced 15 / 50 3 / 50 2 / / 47 Socially Aware = 26 / 49 = 14 / 50 = 10 / 49 = 1 / 47 Indexed Diversified n/a n/a n/a n/a Conservative Balanced 14 / 25 3 / 25 2 / 25 4 / 22 Stable 15 / 50 3 / 50 2 / 50 6 / 44 Source: SuperRatings Fund Crediting Survey February

14 Global activity easing Earnings environment becoming challenging Source: AustralianSuper. 14

15 Interest rate outlook How things have changed in 6 months Source: Morgan Stanley Research. 15

16 Yield curve inversion 1. US 3mth / 10 year inverted as 10 year bond fell to circa 2.4% 2. Historically a reliable predictor of US recession not always! Source: Fisher Investments. 16

17 Yield curve inversion Is it signalling recession? 1. Inversion needs to persist 2. Historical comparisons difficult given unconventional monetary policy in play (QE & forward guidance) 3. Current slowdown in the US driven by external forces EU and China slowdown. 4. US Fed has conventional ammunition stimulate the economy. 17

18 Interest rate outlook How things have changed in 6 months Source: Morgan Stanley Research. 18

19 Australian inflation not a deterrent to cutting rates 10 Australia Inflation RBA target band 2-3% Headline CPI %y/y Core CPI %y/y (average of trimmed & weighted) Source: AustralianSuper. 19

20 One direction for the AU$ down Source: AustralianSuper. 20

21 Balanced option How we re presently positioned Asset Allocation AustSuper* Median Rel Listed Equities 53.4% 55.0% -1.6% Private Equity 4.1% 2.8% +1.3% Unlisted Assets 23.3% 21.0% +2.3% Fixed Income 12.6% 13.1% -0.5% Cash 6.7% 8.1% -1.4% Total 100.0% 100.0% Currency 25.4% 21.8% +3.4% *Balanced option as at 28 February

22 Thank you Please feel free to ask us questions.