After a record 2020/21 financial year in which three of our investment options were named the top performers in their respective categories by SuperRatings, our strong performance has continued into the first quarter of the new financial year.

According to independent research house SuperRatings, each of our tailored investment options – Aggressive, Growth, Balanced, Conservative, and Cash – were ranked in the top quartile for their respective categories for the September 2021 quarter, with Aggressive ranked first^.

These returns were driven by strong performance across each of our portfolios, with private equity returning 8.6 percent over the quarter. Our ‘real asset’ portfolio – think physical assets such as infrastructure and property – returned 3 percent over the quarter, driven by strong returns from our Australasian tree plantations.

Performance for super accounts

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

Investment option
Financial year to date:
as at 30 September 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
3.5%
26.9%
10.2%
10.8%
-
-
-
Glidepath: Altitude
2.8%
22.0%
9.0%
9.4%
-
-
-
Glidepath: Cruising
2.4%
18.2%
7.9%
8.4%
-
-
-
Glidepath: Destination
2.2%
15.4%
6.8%
7.2%
-
-
-
Aggressive
3.5%
26.8%
10.2%
10.8%
9.0%
9.1%
9.3%
Growth
2.8%
22.0%
9.0%
9.4%
7.9%
7.9%
8.1%
Balanced
2.2%
15.3%
6.8%
7.2%
6.2%
6.3%
6.7%
Conservative
1.4%
9.8%
5.1%
5.4%
4.7%
4.8%
5.2%
Thrifty
1.7%
-
-
-
-
-
-
Cash
0.2%
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 30 September 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 years10.0% (6 year return)6.7%+3.3%
Glidepath: AltitudeCPI +3.5% p.a. over 7 years8.7% (6 year return)5.7%+3.0%
Glidepath: CruisingCPI +3.0% p.a. over 6 years7.7% (6 year return)5.2%+2.5%
Glidepath: DestinationCPI +2.5% p.a. over 5 years7.2% (5 year return)4.7%+2.5%
AggressiveCPI +4.5% p.a. over 10 years10.5% (10 year return)6.6%+3.9%
GrowthCPI +3.5% p.a. over 7 years8.1% (7 year return)5.6%+2.5%
BalancedCPI +2.5% p.a. over 5 years7.3% (5 year return)4.7%+2.6%
ConservativeCPI +1.5% p.a. over 3 years5.0% (3 year return)3.6%+1.4%
CashBloomberg AusBond Bank Bill over 1 year0.7% (1 year return)0.0%+0.7%

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.

^According to SuperRatings Top 10 Super Funds, for the financial year to date ending 30 September 2021 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 10 and top quartile in their categories. 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 Qantas Super investment manager Chris Grogan talk us through the latest market activity and what’s on the horizon:

The 'September effect'

As you’ll often hear us say, past performance is not a guarantee of future performance when it comes to investing, but there are some interesting trends or quirks to be spotted in history.

One of these is the so-called Santa Claus rally, which often sees an increase in the stock market from the last week of December through to early January.

Another trend investors have identified is the ‘September Effect’, which sees share markets often – but not always – experience a dip in September. According to Investopedia, since 1950, the month of September has seen an average decline in the Dow Jones Industrial Average (DJIA) of 0.8 percent, while the S&P 500 has averaged a 0.5 percent decline during September.

As Chris explained, there’s no official reason for this market quirk, but one theory posits that the effect is the result of investors switching up their portfolios after returning from the northern hemisphere summer.

Share markets did experience a slight dip this past September, with the benchmark ASX 200 index finishing the month down 2.6 percent. However, both our Australian and global equities portfolios saw positive returns for the quarter overall.

The Chinese economy

Months after the Ever Given container ship captured the world’s attention by blocking the Suez Canal for a week, attention has turned to the Chinese property development giant Evergrande.

The country’s second-largest development company, Evergrande has more than US$300 billion in debt. The company sparked concern after it told its investors in September 2021 that it would not be able to make two upcoming interest payments on time.

While Evergrande did eventually manage to make these payments, pausing work on developments and selling off assets in order to front up the cash, the situation highlighted the role of the company in, and its effect on, the wider Chinese economy.

Evergrande has further payments due in the coming months – and markets will be watching, paying particular attention to what actions the Chinese government will take, if any, to aid the company and safeguard the nation’s economy.

So, why does the rest of the world need to pay attention? Well, as Chris explained, events in the Chinese economy tend to flow on to the rest of the world. A reduction in real estate development, for example, will mean a reduction in China’s demand for iron ore, the majority of which is imported from Australia.

Our Investment team will be keeping a close eye on China and any flow-on effects in the months ahead.

Confidence returns as lockdowns end

Having spent most of the September quarter locked down, consumers in NSW and Victoria wasted no time in getting back to spending as they exited lockdown in October.

Analysis of credit and debit card spending from the Commonwealth Bank, which covers approximately 40 percent of consumer payments transactions in Australia, found NSW spending was 23.3 per cent higher in the week ending 29 October 2021 than the corresponding week in 2019, while spending in Victoria was up 10 percent compared to the same week in 2019.

According to the data, while in-person spending has increased, there have not been corresponding declines in spending online or on goods.

This activity is reflected in forecasts from the Reserve Bank of Australia (RBA), with Governor Philip Lowe stating the central bank expects the economy will bounce back relatively quickly: growth in Australia’s gross domestic product (GDP) of 3 percent is expected over 2021, and 5 ½ percent in 2022.

Speaking after the RBA Board’s November 2021 meeting, Lowe said, “At the outset of the pandemic, economic policy, including monetary policy, set out to build a bridge to the other side. That other side is now clearly in sight. As restrictions are eased, spending is expected to pick up relatively quickly as people seek a return to a more normal way of life.”

“The rapid increase in vaccination rates has been critical in getting us to this point. More broadly, the support provided by both monetary and fiscal policy means that the Australian economy is well placed to resume its expansion.”

Despite this outlook, the RBA held steady again on the cash rate, keeping it on hold at its record low of 0.1 percent.

However, the central bank announced it would be discontinuing its yield target, or its yield curve control policy. This had seen the RBA buy billions in Australian government three year bonds, which mature in April 2024, to drive down their yield (or return) to 0.1 percent in line with the cash rate. This in turn allowed banks to offer borrowers cheaper loans.

Lowe explained this decision was made due to improvement in the economy, and earlier-than-expected progress towards the RBA’s inflation target of 2-3 percent.

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 2020/21 performance and the stories behind the numbers.

If you missed it, you can catch up now.

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