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Qantas Super has had a strong start to the 2024 calendar year, with three of our investment options hitting double digit returns for the financial year to 31 March 2024.

This growth was spurred by our listed equities portfolio, with global equities up 30 percent for the 12 months to 31 March 2024 and our Australian equities portfolio was up 14.7 percent over the same period. A large part of this return came over the March 2024 quarter, with global and Australian equities up 13.8% and 6.1% respectively for the quarter.

Qantas Super’s bond portfolio was positive over the quarter, while our infrastructure portfolio returned 3 percent.

Performance for super accounts

Returns for 1, 3, 5, 6, 7, and 10 years are to 30 June 2023.

Investment option
Financial year to date:
as at 31 March 2024
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
10.5%
8.2%
11.3%
7.8%
8.5%
8.9%
-
Glidepath: Altitude
9.1%
7.3%
9.6%
6.9%
7.5%
7.8%
-
Glidepath: Cruising
7.7%
6.2%
8.3%
6.2%
6.7%
7.0%
-
Glidepath: Destination
7.0%
5.2%
7.4%
5.5%
5.9%
6.2%
-
Aggressive
10.4%
8.0%
11.3%
7.8%
8.5%
8.9%
8.7%
Growth
9.1%
7.3%
9.6%
6.9%
7.4%
7.8%
7.5%
Balanced
7.1%
5.3%
7.4%
5.5%
6.0%
6.2%
6.1%
Conservative
5.6%
4.7%
5.2%
4.2%
4.6%
4.7%
4.6%
Thrifty
11.4%
11.2%
-
-
-
-
-
Cash
3.2%
3.0%
1.4%
1.5%
1.5%
1.5%
1.7%

Glidepath was established on 1 October 2015. Thrifty was established on 1 July 2021. 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 2024 – all returns and objectives are per annum and after investment fees.

Investment optonReturn objectiveActual returnReturn objectiveDifference
Glidepath: Take-offCPI +4.0% p.a. over 10 years9.6% (8 year return)7.7%+1.9%
Glidepath: AltitudeCPI +3.5% p.a. over 7 years8.0% (7 year return)6.9%+1.1%
Glidepath: CruisingCPI +3.0% p.a. over 5 years7.1% (5 year return)6.9%+0.2%
Glidepath: DestinationCPI +2.5% p.a. over 5 years6.2% (5 year return)6.4%-0.2%
AggressiveCPI +4.0% p.a. over 10 years8.5% (10 year return)7.3%+1.2%
GrowthCPI +3.5% p.a. over 7 years8.0% (7 year return)6.9%+1.1%
BalancedCPI +2.5% p.a. over 5 years6.3% (5 year return)6.4%-0.1%
ConservativeCPI +1.5% p.a. over 3 years5.1% (3 year return)6.7%-1.6%
ThriftyCPI +3.0% p.a. over 7 years 7.8% (2 year return)6.5%+1.3%
CashBloomberg AusBond Bank Bill over 1 year4.1% (1 year return)4.2%-0.1%

As Glidepath was established on 1 October 2015, only eight year returns are shown for Glidepath: Take-off. Thrifty has a 7 year investment horizon, however as it was established on 1 July 2021 only the two year return can be shown.

What's behind the numbers?

Want to know the stories behind the numbers? We had Chris Grogan, Qantas Super’s Head of Defensive Assets and Deputy CIO, talk us through the latest market activity and what’s on the horizon:

Market’s pricing in of rate cuts

Markets were buoyed throughout the March 2024 quarter by the expectation of interest rate cuts from the US Federal Reserve, with other central banks around the world also expected to follow suit. This resulted in strong performance in listed equities, with the Australian benchmark S&P/ASX 200 reaching a new record high of 7,910.7 points on 2 April 2024.

“Cutting interest rates is good for business and for lenders, and the stock market gets excited about that,” Chris said.

While the market may have been pricing in rate cuts, Chris explained that a strong earnings season also spurred growth: for example, tech company Nvidia, one of the so-called ‘magnificent seven’ tech stocks in the US, reported in February revenue growth of 265 percent over the 12 months to 31 December 2023.

However, growth slowed significantly through April 2024 as inflation in the US has remained higher than the market anticipated, leading investors to cut back their expectations of interest rate cuts.

Closer to home, the Board of the Reserve Bank of Australia (RBA) chose to keep rates on hold at its meeting on 7 May 2024, explaining in a statement that while inflation continues to “moderate”, it is declining more slowly than previously anticipated.

“The economic outlook remains uncertain and recent data have demonstrated that the process of returning inflation to target is unlikely to be smooth.”

In turn, the RBA stated that it is “not ruling anything in or out” when it comes to interest rates and will “rely upon the data and the evolving assessment of risks”.

A look at a few of our latest investments

In 2021, Qantas Super announced our ambition of achieving net zero carbon emissions across our investment portfolio by 2050. We are continually looking at the best ways to reach our ambition and we may occasionally make changes to ensure we are on the right track.

We recently announced a couple of changes and provided an update on the work we’ve done so far.

As part of this work, we have made a number of private markets investments that support the broader economic transition to net zero, including renewable energy and electrification solutions, e-waste recycling for green metals extraction, and sustainable and regenerative agriculture.

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.

Why we talk about the long term

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.

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