2020 has turned long held assumptions about the global economy on their head.
The coronavirus pandemic has grounded international travel, seen record unemployment and taken investment markets on a wild rollercoaster ride.
But even amongst the economic uncertainty and the very real hardships that people are facing, we’ve also seen communities come together and hopes for a brighter future. As we close out the financial year and hit the midpoint on 2020 it’s time to take stock and analyse the impact on members’ super balances.
The lay of the land
Markets fell significantly and very quickly as the coronavirus pandemic hit global markets back in March. Despite the initial panic, we’ve seen substantial rebounds since then. While markets are still a bit lower than their record highs in February, they’re back to late 2019 numbers.
Encouragingly, April and May saw market sentiment around the world improve as the public lockdowns implemented in most countries helped flatten the curve and slow the virus spread.
Another key factor has been the size of stimulus put in place by Governments and Central Banks to support economies and markets around the globe. These short-term measures have helped brace the economy and the job market. In Australia the Job Keeper and Job Seeker programs have provided significant support, while banks have provided a temporary mortgage amnesty for many families.
We’re still in uncharted waters as far as the virus and economic fallout are concerned, but Australia has been fortunate enough to withstand the immediate financial crunch. This has influenced investor sentiment, which in turn has impacted retirement savings.
What’s happening with my retirement savings?
The fund’s investment team has been watching the markets closely and adjusting investment strategies as conditions change. Market volatility has produced some excellent longer-term opportunities which we have taken advantage of.
At the same time, our rolling one year returns to 30 June 2020 paint a clear picture. In what has been one of the most turbulent years in living memory, Equip Account Based Pension members in the Balanced Growth option have received a 0.54% return, while the SuperRatings median for similar fund allocations is a loss of -0.71%.
Investment Performance
Equip comparison to June 30 2020*