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Changing market conditions emphasise the need for long-term focus: AustralianSuper

By Adrian Suljanovic
2 minute read

Australia's largest super fund has reported its first negative return since the GFC.

AustralianSuper’s Balanced option delivered an annual return of -2.73 per cent for the 2022 financial year, the first negative return since the global financial crisis.

Chief investment officer, Mark Delaney, has stressed that a long-term focus is crucial in maintaining members’ best interests.

Although the fund delivered a record-high return of 20.4 per cent in the 2021 financial year, the negative return reflected the challenging global investment conditions, heightened geopolitical tensions, rising inflationary pressures and interest rates over the last six months, according to Mr Delaney.

Mr Delaney expressed that “the focus for super members must be on the long term,” rather than pursuing a short-term focus, and actively investing in the best interests of members in order to ensure that members are in the best possible financial position when reaching retirement.

“As a long-term investor, we know from experience that while periods of market volatility can be unsettling, they also create new investment opportunities,” he said.

“AustralianSuper is actively looking for investment opportunities that have been mispriced by the market in the short term, while also making new investments where we see long-term value.”

Mr Delaney also claimed that if members had invested in the fund’s Balanced option for the past 20 years, their retirement savings would have quadrupled.

More than 90 per cent of AustralianSuper’s members have invested in the Balanced option, seeing returns of 5.59 per cent per annum over 3 years, 7.28 per cent over 5 years, 9.32 per cent over 10 and 6.13 per cent over 15 years.

Mr Delaney encouraged members to refrain from making decisions based on short-term market movements due to its volatility which “may see members worse off in the long run.”

Mr Delaney also said that the fund has started to “readjust to a more defensive strategy” as the economic cycle changes and as conditions become less supportive of growth asset classes such as shares.

“After more than 10 years of economic growth, our outlook suggests a possible shift from economic expansion to slowdown in the coming years,” he said.