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Welcome to your January 2015 bulletin

We wish all of our members a Happy New Year and welcome you to what we hope will be another "super" year in 2015!  Don't forget - if you made a New Year's resolution to get your super sorted in 2015 - our Member Advice consultants are available to meet with you in person or by phone to make sure you can get the most out of your super arrangements with AvSuper.

Despite another volatile quarter for investments, happily we ended the December 2014 quarter in positive territory for all of our investment options.  More information is below and on our website.  We've also provided an information update on the Financial Systems Inquiry report which is also available from our website.

Michelle Wade,
CEO


We're planning a number of improvements and enhancements during 2015, including a refreshed website, enhancing our Member Online service, a new investment option and even more financial advice options for members - we look forward to updating you on these over the coming months as we launch them.


December 2014 Quarterly Investment Update

The sharp decline of various commodity prices drove market behaviour over the December quarter and significantly impacted Australian mining and resources companies. The other key change was halving the crude oil price since June 2014 due to surging US oil supply, weaker demand globally and Saudi Arabia’s refusal to cut production. This impacted a number of oil producing countries, in particular Russia with interest rates increasing by 6.5% to 17% in December. Conversely, the US economy showed strong economic growth, improved consumer confidence and solid labour force growth.   

The quarter was also affected by continued slow global growth. Following Prime Minister Abe’s reelection, the Bank of Japan announced it would extend its quantitative easing program following more disappointing figures.  Deflation put greater pressure on the European Central Bank to identify further stimulatory measures. Geopolitical concerns in Syria, Iraq and the Ukraine, along with the spread of the Ebola virus, also continued throughout the quarter.

The MSCI World ex-Australia Index (hedged into AUD) rose 4.1% over the quarter. The Australian Dollar depreciated against most major currencies and this resulted in a stronger return of 8.3% (in AUD) on an unhedged basis. The strongest performing developed market, in local currency terms, was Japan with the Nikkei up 6.7%.  

The S&P/ASX300 Accumulation Index underperformed hedged overseas equities; 2014 saw the Australian equities (5.3%) lag significantly behind hedged overseas equities (13.2%). Small cap stocks significantly underperformed large cap stocks for the quarter with the S&P/ASX50 Accumulation Index returning 3.1% and the ASX Small Ords Accumulation Index retracting by 3.9%.  
 

Scott Malpass
Investment Officer

The Australian Dollar depreciated against most major developed market currencies, including the New Zealand Dollar, European Euro and British Pound, but appreciated against the Japanese Yen. The AUD depreciated 6.5% against the USD in the quarter, following a depreciation of 7.3% in the September quarter. The USD was amongst the strongest performing currencies on expectations of strong economic growth and the likelihood of US interest rates rising well ahead of Japan and the Eurozone.


Investment Returns (net of investment fees and taxes) to 31 December 2014

Investment Option

Quarter

Financial year to date

5 years (annualised)

Growth (MySuper)#

3.5%

4.8%

8.0%

Conservative Growth

2.1%

2.5%

*

Stable Growth

2.6%

3.5%

7.4%

High Growth

3.9%

6.2%

9.3%

Australian Shares

2.0%

2.9%

*

International Shares

5.0%

8.2%

*

Cash

0.6%

1.2%

3.7%

Past performance may not be an indicator of future performance.
# Your super will be invested in our Growth (MySuper) option if you don't make an investment choice.
* The investment returns for the quarter and the financial year to date detailed above are real investment returns for the period shown, not annualised or 'per annum' returns which may differ from the numbers above.

AvSuper News

In December, the financial systems inquiry report was released. Many of the recommendations have a potential impact on super so we have summarised the report in a fact sheet. As the Government responds to the report, we will update this fact sheet to keep you informed.

Your half year transactions and balance can be viewed within Member Online now so you can review your super situation to start 2015.

Selecting Super finalist for personal super product of the year – we’re pleased to say that AvSuper was announced as a finalist in 2014.

New PDSs, investment guide and website coming soon!


 

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