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20.62% Top Quartile (MySuper) Return
1-year net# return ended 30 June 2021*
It has been an exceptional year for equities growth and return. This is reflected in AvSuper’s Growth (MySuper) Option which returned 20.6% for the year. This is the highest rolling one year return in AvSuper’s 30-year history. The Growth (MySuper) option returns over the longer period continue to be strong at 7.9% over three years, 8.7% over five years and 8.4% over ten years*.
AvSuper also performed well overall in peer rankings. The Growth (MySuper) option performance was well above median for all MySuper funds. Our Cash and High Growth options are both in the first or second quartile against peers from one year through to ten years. Whilst our primary focus is to achieve our investment objective for each option, we remain aware of how we are tracking relative to similar funds’ performance. We do this to ensure we are providing competitive outcomes for our members.
The large losses sustained in the 2020 financial year have generally been recovered. Notably our Australian (23.6%) and International Equities (26.9%) and Private Markets (21.0%) sectors did extraordinarily well this year. We were pleased with our alternatives sector which includes hedge funds (8.03%).
However, the low interest rate environment had a big impact on cash (0.38%) and fixed income (1.6%) returns, noting that fixed income and interest rates in general are staying at historically low rates. We continue to watch the US Federal Reserve for signs of rate increases or inflationary pressures, which will in turn force all other central banks down the same path.
During 2020-21, AvSuper undertook a number of changes to further improve our investment performance. We amended the Growth option’s Strategic Asset Allocation and adjusted its equity manager line up. This included adding new investment managers, Hyperion (Australian Equities), Baillie Gifford (International Equities) and Flexstone (Private Markets). The alternative investments sector was also updated. These investments provide diversification and are not directly aligned to share markets, so often provide a buffer against short term fluctuations.
Additionally, unit pricing moved from weekly to daily on 30 November 2020. This allows for ease of switching for members and increased pricing transparency.
Your Future Your Super
July 2021 sees the commencement of the Your Future Your Super (YFYS) laws, originally announced in the October 2020 Federal Budget and legislated in late June 2021. Among the changes is a retrospective investment performance test for MySuper products.
The test looks at the last seven years’ performance* for each MySuper option and compares that to a legislated benchmark for the Strategic Asset Allocation (SAA) for that option. If the performance over seven years is more than 0.5% under the benchmark, then the fund has ‘failed’ the test, regardless of individual fund circumstances. In targeting our stated investment objective for each option, AvSuper has historically been prepared to take less risk than the stated long-term SAA if we determined it to be in members’ interest. While this approach mitigates risk, it may mean a lower return than would be returned by the SAA.
With the markets at all-time highs, the outlook for 2021-22 is mixed and will depend on the ongoing pandemic situation. Going forward, we expect global growth to be around 5% due to the pent-up demand for spending resulting from the savings incurred during the pandemic lockdowns around the world. This will continue for the next year or so until spending returns to normal levels as the pandemic becomes under control.
AvSuper is looking forward to the challenges and opportunities in 2021-22 and continuing to provide you long-term returns with an acceptable level of risk.
* Remember that past performance is not always a reliable indicator of future performance
# Net of investment fees and taxes
AvSuper Growth (MySuper) option 2020-21 return is 20.6%
1 year net return ended 30 June 2021
(Soft close prices – official returns to be posted around 30 July 2021)
I am very proud to announce that as at 30 June 2021 we have achieved the best annual investment return for members for the Growth (MySuper) Options, since AvSuper began over 30 years ago. For now, we have used soft close numbers for the Growth (MySuper) Option to give members an idea of the final numbers. The official returns for all options will be posted around July 30.
This return has been buoyed by stellar market returns over the past 12 months, including big upticks in consumer discretionary, communication services, commodity prices and financials over the past 6 months. The All Ordinaries posted its best run in 34 years (26.4%). This is a massive recovery of 60% from the March 2020 lows when the effect of COVID-19 hit financial markets. Additionally, this boom was lifted by record levels of government and central bank spending, and even eclipsing the boom years post GFC.
AvSuper’s comparative performance against the existing published returns of some major superannuation funds MySuper products looks positive.
Over a year that has so much turbulence and change in markets AvSuper has always been conscious of the responsibility to preserve member benefits.
We have been steadily fine tuning our investments and strategy. AvSuper can take advantage of our smaller size and therefore has been investing in like for like sized Investment Managers and strategies. These strategy changes will be noted more thoroughly in our upcoming Annual report and after the Trustees have reviewed the full year financial results.
Past performance is not necessarily an indicator of future performance and it is important to note that your super is invested with a long term focus. The investment earnings on your account balance may vary from above depending on when (if) you made any switches and contributions.
We have outlined these changes on our Legislation updates page and summarise them below for you:
- Your Future, Your Super
includes Fund Stapling (to avoid inadvertent account duplication) and a comparison tool
- recontributing COVID-19 early release withdrawals
- bring forward arrangements extended to 65 and 66 year olds
- removal of excess concessional contributions charge
- increase concessional contributions cap
For further information on any of these measures, please contact our Member Advice Consultants.
We are delighted to announce that an administration fee cap now applies to all of our member accounts. This means that each financial year, starting from 1 July 2021, you will pay no more than $1,000 in percentage-based administration fees plus $1.15 per week or...
We have been informed that there are some spam messages being sent to super fund members at the moment. These messages appear to be from the ATO or a super fund and provide a link for you to click for immediate action. Please do not click on any links in such...
Investment update for June 2021 Markets still impacted by the pandemic and political events The 2021 financial year has witnessed the rollout and distribution of vaccines across major economies. Around a quarter of the world’s population has received at least the...
AvSuper Growth (MySuper) option 2020-21 return is 20.6% 1 year net return ended 30 June 2021 (Soft close prices – official returns to be posted around 30 July 2021)Dear Members, I am very proud to announce that as at 30 June 2021 we have achieved the best annual...
Further to the fact sheets we provide after the 2020 and 2021 Federal Budgets, there have been a number of other very recent legislative changes that will impact on superannuation. We have outlined these changes on our Legislation updates page and summarise them...
Investment update for May 2021 Higher than expected inflation data surprised markets In May, the strain on the India’s health system and economy, following a surge in COVID-19 cases, highlighted the need for swift global vaccination rollouts. Inflation data surprised...
Welcome to our investment performance update as we head towards the end of financial year. The following tables summarise our performance against each of the options’ investment objectives.The Growth (MySuper) Option moved into 2nd quartile position compared to other...