2023 begins with strong gains
The positive investment market performance of recent months is making up for lost ground, explains Ed Tomlinson.
We recorded strong returns for the first quarter of 2023 across almost all smartMonday investment options, despite what was a turbulent three months globally.
A rally in international shares led the way, with our international shares options gaining more than 7.5 per cent in the January to March quarter. Pleasingly for members, strong performance was evident in a wide range of our options, from MySuper to ‘balanced growth’, Australian shares to fixed interest.
Predictably, it was property that recorded the smallest amount of growth. An obvious result of rising interest rates and investor uncertainty in that sector.
smartMonday superannuation investment performance to 31 March 2023 (%)
Super option
10 years p.a.
7 years p.a.
5 years p.a.
3 years p.a.
1 year p.a.
3 months p.a.
MySuper age 40
N/O
8.4
7.4
11.1
-1.2
3.5
MySuper age 45
N/O
8.2
7.1
10.4
-1.2
3.5
High Growth - Index
9.2
8.9
8.2
13.4
-1.8
4.4
Growth - Index
8.3
7.8
7.1
11.2
-1.9
4.3
Balanced Growth - Index
7.2
6.6
6.0
8.8
-2.0
3.9
Moderate - Index
3.9
2.8
2.4
2.1
-3.1
3.1
Defensive - Index
1.7
0.9
0.7
0.3
-2.7
2.6
Notes: Data to March 31, 2023. PA = per annum (indicating annualised returns over that period). FYTD = financial year to date. N/O = product not offered in this time period. The performance returns shown above are calculated net of investment fees and transaction costs and an allowance for tax on investment income. The returns are based on unit prices of each investment option calculated as at the end of the month. Unit prices are based on the latest available investment valuations at the time of calculation, which means they could be one or two days behind the current market indices. Past performance is not a reliable indicator of future performance.
For full performance results, including our pension options, visit the investment returns section of our website.
These results are solid and pleasing given we’ve had 12 months of almost unrelenting interest rate rises, business turmoil (such as in the banking sector) and commentary about the possibility of recession.
While you can read more about that in last month’s article, What to expect from your super as rates rise and banks collapse, it’s worthwhile reiterating here that we can’t know if the positive performance we’ve seen this year will continue.
We can see from consumer price index data for the first quarter of 2023 that inflation is now beginning to slow locally. But it’s still extremely high. Central banks in the US and Europe appear intent on continuing to raise rates until they see inflation slow in those economies. And we shouldn’t assume the recent pause in rate hikes from the Reserve Bank of Australia means it won’t resume doing so. It’s also possible the banking crisis in the US and Europe could have further to go, though regulators have done an impressive job of containing the fallout so far by easing contagion fears.
We are paying attention to all these factors as they unfold and continue to adjust our investment portfolio as we focus on long-term results for our members.
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