Despite the uncertainty in global investment markets over the last few months, Qantas Super has had a strong start to the 2022 calendar year.

Our Glidepath: Take-off option was ranked the top performer  over the 1 year, 3 years, and 5 years against every other default option in its category in the SuperRatings performance survey to 31 March 2022*.

A number of our investment options are ranked in the top five in their respective categories for the financial year to date to 31 March 2022 by SuperRatings, with Conservative and Balanced topping their categories, Aggressive ranked second in its category and Growth ranked fourth*.

Qantas Super investment manager Chris Grogan explained that while equities saw some ups and downs, our fixed interest portfolio performed well relative to the market, while commodity prices also contributed to strong returns.

Performance for super accounts

The results for the financial year to date are as at 31 March 2022. Meanwhile, 1, 3, 5, 6, 7, and 10 year returns are to 30 June 2021.

Investment option
Financial year to date:
as at 31 March 2022
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
4.8%
26.9%
10.2%
10.8%
-
-
-
Glidepath: Altitude
4.0%
22.0%
9.0%
9.4%
-
-
-
Glidepath: Cruising
3.5%
18.2%
7.9%
8.4%
-
-
-
Glidepath: Destination
3.5%
15.4%
6.8%
7.2%
-
-
-
Aggressive
4.7%
26.8%
10.2%
10.8%
9.0%
9.1%
9.3%
Growth
4.0%
22.0%
9.0%
9.4%
7.9%
7.9%
8.1%
Balanced
3.5%
15.3%
6.8%
7.2%
6.2%
6.3%
6.7%
Conservative
2.6%
9.8%
5.1%
5.4%
4.7%
4.8%
5.2%
Thrifty
0.9%
-
-
-
-
-
-
Cash
0.4%
0.7%
1.3%
1.4%
1.5%
1.6%
2.0%

As Glidepath was established on 1 October 2015, only five year returns are available for these options, while as Thrifty was established on 1 July 2021, only financial year to date returns are available for this option. Since 1 October 2015, Qantas Super’s retirement solution for members has been offered in our Gateway division (previously offered in Divisions 9 and 14). Returns shown are based on the returns of the corresponding investment options previously available through Division 9. Returns do not include administration fees, insurance premiums, and other fees that may be applied directly to your account. Returns for super and TTR accounts are also net of taxes. 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 2022 – 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 years10.4% (6 year return)7.2%+3.2%
Glidepath: AltitudeCPI +3.5% p.a. over 7 years8.9% (6 year return)6.2%+2.7%
Glidepath: CruisingCPI +3.0% p.a. over 6 years8.0% (6 year return)5.7%+2.3%
Glidepath: DestinationCPI +2.5% p.a. over 5 years6.8% (5 year return)5.2%+1.6%
AggressiveCPI +4.5% p.a. over 10 years9.8% (10 year return)6.9%+2.9%
GrowthCPI +3.5% p.a. over 7 years7.2% (7 year return)6.0%+1.2%
BalancedCPI +2.5% p.a. over 5 years6.8% (5 year return)5.2%+1.6%
ConservativeCPI +1.5% p.a. over 3 years4.9% (3 year return)4.5%+0.4%
CashBloomberg AusBond Bank Bill over 1 year0.6% (1 year return)0.0%+0.6%

As Glidepath was established on 1 October 2015, only six year returns are shown for these options. As Thrifty was established on 1 July 2021, no returns are shown for this option yet. 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.

*Returns for the Qantas Super Glidepath Take-Off option were ranked number 1 over 1, 3, and 5-year periods as published in the SuperRatings Fund Crediting Rate Survey – Default Options as at 31 March 2022. In addition, according to SuperRatings Top 10 Super Funds, for the financial year to date ending 31 March 2022 returns for Qantas Super’s Aggressive (Growth 77-90 category), Growth (Balanced 60-76 category), Balanced (Conservative Balanced 41-59 category), Conservative (Capital Stable 20-40 category), and Cash (Cash category) options are ranked in the top 5 and top quartile in their categories. Past performance is not a reliable indicator of future performance. Before considering whether Qantas Super is right for you, consider the PDS and TMDs. Past performance is not a reliable indicator of future performance.

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:

Interest rates officially start to rise

After much debate around whether the Reserve Bank of Australia (RBA) should – and whether it would – increase the cash rate, the board of the central bank officially decided to increase the cash rate by 25 basis points at its May 2022 meeting. The cash rate now sits at 0.35 percent.

This is the first time the RBA has lifted the cash rate during a federal election campaign since 2007. It’s also the first rate rise since November 2010.

It comes after the RBA lowered the cash rate to an historic low of 0.10 percent in November 2020, stating at the time that it did not envision it would raise rates until 2024.

Philip Lowe, governor of the RBA, said, “The Board judged that now was the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic.

“The economy has proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected. There is also evidence that wages growth is picking up. Given this, and the very low level of interest rates, it is appropriate to start the process of normalising monetary conditions.”

The RBA’s decision on the cash rate follows the release of data from the Australian Bureau of Statistics in late April that found inflation rose by 5.1 percent over the past year – the sharpest increase in over 20 years.

According to Lowe, further rate hikes will be needed over the period ahead in order to ensure that inflation returns to target.

The US Federal Reserve also began raising rates in March this year.

So, what does the rate hike mean for your super? Well, if you’re invested in our Cash option, you’ll be pleased to know that ANZ has passed on the rate increase for the savings account in which our Cash option is invested. For everyone else, the impacts aren’t so direct.

Our Investment team and investment managers around the globe will be keeping a close watch on central banks.

Is there an election effect?

With Prime Minister Scott Morrison choosing to send Australians to the polls on one of the last dates possible, we’ve had a long election campaign of different parties trying to convince Australians they’re the better economic managers.

But what impact does an election and its result, whether it’s a change of government or re-election of the current government, actually have on the economy and investment markets?

As Chris explained, not that much. Typically, the biggest impact for markets can be the uncertainty in the lead up to an election – because as we’ve heard many times, if there’s one thing markets don’t like, it’s uncertainty.

However, the extent of the impact that government policies actually have (beyond the property market, at least) is up for debate; rather, the place of Australian investment markets is more heavily influenced by global factors and the wider economic context.

In this regard, the changing interest rate environment in the US and globally, combined with the geopolitical tensions outlined below are more relevant to investment markets than the Australian election.

Geopolitical pressures

The biggest story of the quarter has arguably been the situation between Russia and Ukraine.

As was expected, the West imposed a range of sanctions on Russia after its invasion of Ukraine on 24 February. Russia responded in turn with measures including a temporary embargo on all foreign investors selling Russian assets, including listed equities and bonds.

With Russia a key supplier of commodities such as oil, the various moves have led to sharp increases in commodity prices and volatility in global markets. Qantas Super’s diversified investment strategy includes exposure to energy (for example, US Gas), and these exposures have increased in value in these difficult times, helping reduce the volatility across a number of Qantas Super portfolios.

However, it’s important to remember that your super is invested for the long-term, and that volatility is a normal part of investing for the long-term.

In fact, we saw similar volatility in early 2020 as the COVID-19 pandemic began to spread around the world. While this short-term volatility resulted in many super funds delivering negative one-year returns for the 2019/20 financial year, markets quickly rebounded over 2020/21. This rebound saw Qantas Super deliver record one-year returns for the 2020/21 financial year.

While past performance is not a guarantee of future performance, students of financial history know that there have been many examples of human-caused and natural disasters that resulted in volatility at the time, but that financial markets recovered given time.

Catch up on our investment briefing webinar

Our Chief Investment Officer, Andrew Spence and Chris Grogan, Senior Manager Investments, recently held a webinar to take members through our performance in the financial year to date, the market outlook, and our investment strategy.

If you missed it, you can catch up now.

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