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It’s human nature to feel unsettled when there’s significant volatility in global financial markets, as we’re experiencing now as a result of coronavirus (COVID-19). However, volatility is a normal part of investing for the long-term.
Your super is in a strong position to weather the current storm thanks to Qantas Super’s safety-first approach to investment. This approach helps to both protect your super through periods of market uncertainty, as well as capitalise on periods of growth.
We protect your super by investing for the long-term and building well diversified portfolios with investments that complement each other. We invest carefully and thoughtfully, with the help of skilled investment managers around the world.
This means your super is not just invested in the share market; it is invested across over 5,000 investments, which in addition to shares, also includes property, infrastructure, timberland, agriculture, a variety of bonds, and cash. Having your super spread across these different types of investments is designed to help smooth the ups and downs that may be experienced by any one category of investment and allow your super to keep performing in the long-term.
This doesn’t mean your super account balance won’t go up and down as financial markets move, but it does mean the volatility of those moves should be meaningfully less. And for those members who have a defined benefit super account and have not yet reached their superannuation date, one of the key benefits of this type of account is that your super account balance isn’t affected by market movements.
It’s important to remember that each of our investment options, except Cash, has an investment horizon of at least three years, which gives your super time to weather market fluctuations like this.
While it may be tempting to change your strategy when you see share markets falling, in the long run it can make more sense to either stay invested or consider investing more. By changing to a lower risk option in a downturn, you risk selling out at a time when prices are low, rather than taking advantage of falls when markets recover.
Organisations around the world, from health organisations to governments and central banks, are working to limit the impact of coronavirus and stimulate markets and the economy. For example, to support the economy during this period of coronavirus induced anxiety, the Reserve Bank of Australia (RBA) announced on 3 March 2020 that it would lower the cash rate by 0.25 per cent to just 0.50 per cent.
The Governor of the RBA, Philip Lowe stated that once the coronavirus is contained, the Australian economy is expected to return to “an improving trend”.
“This outlook is supported by the low level of interest rates, high levels of spending on infrastructure, the lower exchange rate, a positive outlook for the resources sector and expected recoveries in residential construction and household consumption,” he explained.
While we can’t predict when the coronavirus outbreak will end, we know that like outbreaks in the past, it will eventually end; probably as it becomes one of the numerous viruses that circulate in the global human population and health treatments improve.
If you want to learn more or need help with making a decision about your super, you can get simple advice over the phone or face to face. It’s included as part of your membership so there’s no extra cost.
For most of us, going through the global financial crisis just a couple of months after taking on the role of inaugural Chief Investment Officer (CIO) of a super fund would likely be considered a case of particularly bad timing. Not so for Andrew Spence, who believes his joining Qantas Super as the fund’s first CIO in July 2008 came at the perfect time.
At Qantas Super, we focus on being well diversified by building portfolios with investments that complement each other. That means your super is invested across over 5,000 investments such as shares, property, infrastructure, timberland, agriculture, a variety of bonds, and cash. Take a look at a couple of the things we’ve invested in.
According to independent research house SuperRatings, each of our tailored investment options – Aggressive, Growth, Balanced, Conservative, and Cash – was ranked in the top quartile for their respective categories for the September 2021 quarter, with Aggressive ranked 1st.
