The Australian Retirement Trust has achieved double digit returns across many of its investment options with the fund also optimistic it will continue to generate substantial returns for members in the new financial year.
Speaking to InvestorDaily, Australian Retirement Trust head of investment strategy Andrew Fisher said the 2024-25 financial year was another year of strong performance for the fund.
The fund's default investment option for accumulation accounts, the Lifecycle Investment Strategy, achieved a return of 11.2 per cent for the balanced pool option and 11.9 per cent for the high growth pool over the 2024-2025 financial year.
"We had calibrated ourselves five years ago to a zero interest rate world and thought these kinds of returns were unachievable but we're now in a much more normalised interest rate world," said Fisher.
Over the past five years, Fisher said the key factors driving the performance of the fund have changed year to year.
"Coming out of Covid it was private equity[driving that performance], then as inflation spiked following Covid it was real assets and then in the past couple of years global equities have really stood out," he said.
"In the most recent financial year it was more of a domestic exposure. Australian equities and domestic infrastructure were two of the biggest drives of that relative outperformance."
Domestic infrastructure assets had a particularly strong year, according to Fisher.
"Airports did really well and data centres were also a really attractive place to invest. AirTrunk received a lot of publicity over the year and was one of our more successful investments over the year," he said.
Looking ahead to the 2025-26 financial year, Fisher said while double digit returns may not be realistic, the fund is confident that it can achieve at least an eight per cent return for next year.
"Interest rates remain relatively attractive and bond yields look quite good relative to interest rates," he said.
"Equities look reasonably good other than a few overpriced stocks and a bit of concentration in some markets. We're also confident that unlisted assets will [be able to generate] strong yields.
"We're going into this new financial year relatively optimistic."
