After a 2020 many would like to forget, each of our investment options had a bumper start to the year, delivering strong returns in the March 2021 quarter.

According to Qantas Super investment manager Chris Grogan, investments across equities performed well, with the S&P/ASX300 Index closing the quarter 4 per cent higher.

A number of Qantas Super’s unlisted assets also saw an increase in their valuations, contributing to our strong returns.

Performance for super accounts

The results for the financial year to date are as at 31 March 2021. Meanwhile, 1, 3, 5, 6, 7, and 10 year returns are to 30 June 2020.

Investment option
Financial year to date:
as at 31 March 2021
1 year
3 years
p.a.
5 years
p.a.
6 years
p.a.
7 years
p.a.
10 years
p.a.
Glidepath: Take-off
16.1%
-1.9%
5.8%
Glidepath: Altitude
13.4%
-0.9%
5.3%
Glidepath: Cruising
11.0%
-0.5%
5.1%
Glidepath: Destination
9.3%
-0.4%
4.5%
Aggressive
16.1%
-1.9%
5.8%
5.8%
6.4%
7.6%
7.9%
Growth
13.4%
-0.9%
5.3%
5.3%
5.7%
6.6%
7.0%
Balanced
9.3%
-0.4%
4.6%
4.4%
4.8%
5.6%
6.1%
Conservative
6.1%
0.3%
3.9%
3.8%
4.0%
4.4%
4.9%
Cash
0.6%
1.2%
1.6%
1.6%
1.7%
1.8%
2.4%

As Glidepath was established on 1 October 2015, only three year returns are available for these options. Returns are net of taxes, and do not include administration fees, insurance premiums, and other fees that may be applied directly to your account. The actual return for your account depends on the period of time you were invested in an investment option, the timing of transactions in and out of your account, and the impacts of compounding. Past performance is not a guarantee of future performance.

How your investment options are performing against their objectives

As at 31 March 2021 – all returns and objectives are per annum and after investment fees.

Investment optonReturn objectiveActual returnReturn objectiveDifference
Glidepath: Take-offCPI +4.5% p.a. over 10 years9.6% (5 year return)6.4%+3.2%
Glidepath: AltitudeCPI +3.5% p.a. over 7 years8.3% (5 year return)5.4%+2.9%
Glidepath: CruisingCPI +3.0% p.a. over 6 years7.5% (5 year return)4.9%+2.6%
Glidepath: DestinationCPI +2.5% p.a. over 5 years6.5% (5 year return)4.4%+2.1%
AggressiveCPI +4.5% p.a. over 10 years8.2% (10 year return)6.6%+1.6%
GrowthCPI +3.5% p.a. over 7 years7.0% (7 year return)5.6%+1.4%
BalancedCPI +2.5% p.a. over 5 years6.5% (5 year return)4.7%+1.8%
ConservativeCPI +1.5% p.a. over 3 years4.5% (3 year return)3.4%+1.1%
CashBloomberg AusBond Bank Bill over 1 year0.8% (1 year return)0.1%+0.7%

As Glidepath was established on 1 October 2015, only five year returns are shown for these options. Past performance is not a guarantee of future performance.

Each of our investment options are meeting their stated return objectives.

These objectives are linked to the Consumer Price Index, which measures inflation. We aim to achieve these objectives so your super account delivers a return higher than the rate of inflation over the long term, as your superannuation will support your income and lifestyle in retirement.

What's behind the numbers?

Want to know the stories behind the numbers? We had Chris talk us through the latest market activity and what’s on the horizon:

Big Budget spending

Declaring that “Australia is coming back”, Treasurer Josh Frydenberg outlined significant spending in the Government’s second ‘pandemic Budget’ on 11 May 2021.

With billions promised across a range of measures, the Government is also hoping Australians will spend, with $7.8 billion in income tax cuts promised for individuals, and $16 billion in tax cuts to small and medium businesses by 2023-24.

While the deficit will reach $161 billion this year, Mr Frydenberg believes there is much cause for optimism.

“With more Australians back at work, this year’s deficit is $52.7 billion lower than was expected just over 6 months ago in last year’s Budget,” he said.

“Treasury feared unemployment could reach 15 per cent and the economy contract by more than 20 per cent. This would have meant 2 million Australians unemployed…today the reality is very different. Ahead of any major advanced economy, Australia has seen employment go above its pre‑pandemic levels.”

The Government’s positive outlook is shared by the Reserve Bank of Australia (RBA), which kept the cash rate on hold at its May meeting, a week before the Budget. RBA Governor Philip Lowe said the outlook is for strong growth both this year and next. “The economic recovery in Australia has been stronger than expected and is forecast to continue,” he said.

Lowe added that the RBA has revised its central scenario for GDP growth, with growth of 4¾ per cent expected over 2021 and 3½ per cent over 2022 thanks to a projected increase in business investment and household spending.

The reflation trade

With our diversified investment objectives linked to CPI, or the Consumer Price Index, you’ve probably heard us talk about inflation before – but you may not have heard about reflation.

Reflation is defined as a monetary policy designed to expand output, stimulate spending, and curb the effects of deflation, which often occurs after a period of economic uncertainty or a recession. Reflation policies can include lowering interest rates, reducing taxes, and spending on large projects – for example, many of the announcements made in the 2021 Budget.

With reflation will often come something called the ‘reflation trade’ in investing, or investors turning to the types of assets that are expected to benefit from reflation as the world – and in turn, inflation – starts to get back to normal.

In the share market, investors have sought exposure to ‘value’ shares rather than ‘growth’ shares, like technology companies, for example to play the ‘reflation trade’.

A period of reflation may also see more activity in the bond market. With investors projecting a return of inflation, they may sell off existing bonds in order to buy bonds at a later date with higher yields.

As the world continues on its COVID-19 recovery, our Investment team will be keeping an eye on how inflation moves and its effects on the market.

The continued global COVID-19 recovery

Though the situation in India has provided cause for concern, much of the global mood on COVID-19 is slowly turning positive as vaccine rollouts get underway.

The European Commission, the executive branch of the European Union, is working on a ‘COVID-19 certificate’ to enable travel across Europe over the northern hemisphere summer. The pass will allow those who have been vaccinated, recovered from COVID-19, or who have recorded a negative test result, to travel.

Meanwhile, across the Atlantic, President Biden has announced a goal to administer at least one vaccine shot to 70 percent of the US adult population by July 4, and a range of measures aimed at encouraging Americans to get vaccinated.

Among the measures is a partnership with ridesharing companies Uber and Lyft that will see people receive free rides to and from vaccination sites. Funding will also be provided to community- and faith-based organisations working on programs to connect people to vaccinations.

It comes after President Biden capped off his first 100 days in office by unveiling the American Families Plan, a US$1.8 trillion combination of tax credits and spending.

It was the latest in a line of packages announced by Biden: he signed the US$1.9 trillion American Rescue Plan into law on 11 March 2021 and announced the US$2.3 trillion American Jobs Plan a few weeks later.

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