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By Andrew Spence, Chief Investment Officer of Qantas Super

We know it can be difficult to stay the course when there’s volatility in global financial markets, as we’re seeing now because of Russia’s invasion of Ukraine, which above all is a human tragedy.

However, it’s important to remember that your super is a long-term investment and 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, with three of our investment options ranked the top options in their respective categories over this period by leading independent research house, SuperRatings.

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. And unfortunately, it is difficult for investors to reliably time their exit and re‑entry into financial markets and thereby avoid this volatility. As the adage goes, it’s ‘time in the market’ that counts, not ‘timing the market’.

Our investment options are designed to weather market volatility

Your super remains in a strong position to weather the current storm.

You might ask how much exposure does Qantas Super have to Russia and related markets? Qantas Super’s exposure to Russian assets is less than 0.5% of our $8.5 billion portfolio, however the more important question is how the events in Ukraine will impact on investment markets more broadly.

With this in mind, Qantas Super takes a ‘Safety First’ approach to protecting 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 to ensure we are well-placed to weather the inevitable volatility in financial markets, as well as capitalise on periods of growth.

This means that your super 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 the defined benefit component of your super account balance isn’t affected by market movements.

Think carefully before making changes to your super

It’s also 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. Our Aggressive option, for example, has an investment horizon of 10 years.

So, while it may be tempting to change your strategy when you see financial 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 these falls when financial markets recover.

For example, members who switched their out of their normal investment option and into cash when the COVID‑19 pandemic caused financial markets to dramatically fall in early 2020, may have missed out on the significant rebound that began just a few months later.

Though we expect to see continued market fluctuations over the short-term as the world responds to events in Ukraine, members can rest assured that our expert team is well-prepared to manage your super through any volatility.

Get advice before you switch

A Super Adviser can help you determine which investment options may be right for you. You can book a one-on-one chat over the phone at a time that’s convenient for you. It’s included as part of your membership so there’s no extra cost.

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