Among these investments is goFARM, with Qantas Super committing $200 million to the fund, which will look to transform underutilised agricultural land into horticultural projects. $150 million has already been allocated to two goFARM assets, Riverina Trust and Sandmount Farms. More than 5,000 hectares of land with substantial water holdings will be converted into high yielding, water efficient horticultural crops.
Looking at the broader environmental, social, and governance (ESG) space, Qantas Super also recently committed $75 million to impact investment manager For Purpose Investment Partners.
For Purpose owns a not-for-profit aged care platform, FP Aged Care Australia. The investment helped fund the acquisition of 15 aged care facilities, taking its total owned to 19, including development sites.
This quarter marked another anniversary of the onset of the pandemic. It’s been a particularly interesting four years for global markets since, with the downturn through 2020 followed by record high returns for Qantas Super in 2021, before we saw more ‘normal’ numbers come through from 2022.
As Chris often tells us, if there’s one thing markets dislike, it’s uncertainty, and there was a lot of uncertainty experienced at the start of the pandemic, which led to significant volatility across global markets.
In turn, this led members of super funds across the country to switch to investment options with a lower degree of risk. But as we regularly say here at Qantas Super, super is a long-term investment, so while it can be unsettling to see your balance going up and down, it’s important to look beyond any short-term volatility.
Let’s look at how the last four years could have played out for two members.
A Qantas Super member who moved their balance of $100,000 from our Growth option to our Cash option on 1 April 2020 and did not move it back would have seen their balance grow to $107,810.48* over the four years to 31 March 2024.
Meanwhile, a member who kept their balance in Growth through this same period without switching would have seen their balance grow to $153,096.66* to 31 March 2024.
This is a total difference of $45,286.18*, based on a starting balance of $100,000 and assuming these accounts did not receive any further contributions or deductions (i.e fees). This difference may have been larger if these accounts had been receiving contributions through this time due to the effects of compound interest.
Of course, what if someone had switched options again over that time? The reality is that it’s difficult to ‘time the market’, and by changing to a lower risk option in a downturn, you risk crystallising your loss by selling out at a time when prices are low.
Think of it in terms of buying and selling a house: if you bought a house for $1 million, and then house prices dropped and your home was valued at $750,000, you would only make a loss if you actually decided to sell it at this point in time.