After a somewhat difficult December 2018 quarter, investment markets have had a solid start to 2019, rebounding and making strong gains in the March quarter.

With our portfolios designed to both cope with market volatility during difficult periods and capitalise on gains during positive periods, this rebound delivered significant growth across the board for Qantas Super and contributed to healthy returns for the year and three years to 31 March 2019 – which is illustrated in the chart below.

Performance for super accounts

As at 31 March 2019 – all returns are per annum and after investment fees.

  • 1 year
  • 3 years

Past performance is not a guarantee of future performance.

According to Qantas Super investment manager Chris Grogan, the market’s rebound from one quarter to the next highlights the importance of taking a long-term view when it comes to investing your super.

While it may be tempting to change your strategy when you see share markets falling, it can often make more sense to either stay invested or consider investing more. By switching in a downturn, you risk selling out at a time when prices are low, rather than taking advantage of price falls to profit when markets recover, as they have this quarter.

“If you stick with your long-term plan when the market falls, you give yourself the opportunity to reap the rewards when the market rebounds,” Chris explained.

That is why Qantas Super implements a well-diversified investment approach where the investment time horizon reflects the asset allocation of the investment option.

Your investment options are meeting their long-term objectives

As at 31 March 2019 – all returns and objectives are per annum and after investment fees.

Investment optionReturn objectiveActual returnReturn objectiveDifference
Glidepath: Take-OffCPI +5% p.a. over 10 years10.3% (3 year p.a. return)6.8%+3.5%
Glidepath: AltitudeCPI +4% p.a. over 7 years8.7% (3 year p.a. return)5.8%+2.9%
Glidepath: CruisingCPI +3.5% p.a. over 6 years8.0% (3 year p.a. return)5.3%+2.7%
Glidepath: DestinationCPI +3% p.a. over 5 years7.1% (3 year p.a. return)4.8%+2.3%
AggressiveCPI +5% p.a. over 10 years9.4% (10 year p.a. return)6.8%+2.6%
GrowthCPI +4% p.a. over 7 years8.0% (7 year p.a. return)5.9%+2.1%
BalancedCPI +3% p.a. over 5 years5.8% (5 year p.a. return)4.8%+1.0%
ConservativeCPI +2% p.a. over 3 years5.5% (3 year p.a. return)3.8%+1.7%
CashBloomberg AusBond Bank Bill over 1 year2.0% (1 year p.a. return)1.7%+0.3%

Investment option

As Glidepath was established on 1 October 2015, only three year returns are shown for these options. Past performance is not a guarantee of future performance.

You’re in the pilot’s seat. The key to being confident is making sure your strategy is right for you, and focusing on how you are progressing towards your destination, rather than being distracted by the inevitable ups and downs along the way.

What’s behind the numbers?

Want to know the stories behind the numbers? We had Chris talk us through the latest market activity and what’s on the horizon:

The Australian Federal election

With the Federal Election nearing, our Investment team will be keeping an eye on what policy announcements actually come to fruition once the new Government is formed. Of particular interest are announcements about tax cuts and things like child care subsidies, and their potential effect on the economy.

As Chris explained, anything that eases up the purse strings for households, such as a tax cut, is often a positive for the economy. This is because it usually means consumers have more money to spend on discretionary – or fun – items.

With this in mind, talk of a potential interest rate cut from the Reserve Bank in the months following the election is also on our radar.

But what does that mean?

“An interest rate move impacts people with a mortgage. If you’ve got a variable interest rate mortgage and interest rates are cut, then depending on how much of that cut your bank passes on, chances are your mortgage repayments are going to fall,” Chris explained. If consumers are spending less on their mortgage, this means they generally have more to spend on other items. This can impact retail spending and help increase both business and consumer confidence.

This, in turn, could potentially flow through to a stronger gross domestic product (GDP) and a stronger Australian economy in the long term and a rise in the domestic stock market – which would be a positive impact on most Australians’ super returns.

Should you pay attention to @realDonaldTrump?

With President Donald Trump’s tweets making for good click-bait, it’s no wonder newspapers make sure to track his every move. But while the headlines often forecast doom and gloom, Chris explained that when it comes to the real effect on markets, it’s important to make sure you separate noise from reality.

A confusing tweet or announcement can cause short-term uncertainty for global markets because people are scrambling to figure out the details and determine whether something will have a positive or negative impact.

However, Chris explained that markets tend to overreact to uncertainty and bad news in the short term. This is why Qantas Super has a long-term investment strategy that is consistently implemented.

“The day to day news is just noise; it’s not important to your long-term goal of having a healthy retirement,” Chris said.

“It’s very rare that we would change our portfolio as a result of short-term news or speculation about something happening.”

Growth in China

The Chinese economy has started to pick up over the last year thanks to some stimulus from the Chinese Government. With Australia exporting a significant quantity of commodities to China, this may have a flow-on effect to the Australian economy.

This was something we saw a decade ago during the Global Financial Crisis (GFC). The Chinese Government launched a stimulus package at the time to help build everything from houses and roads to bridges and airports.

With China buying commodities from Australia to facilitate this building, the Australian economy saw a boost that helped it keep its head above water and ride out the GFC.

Our Investment team will be keeping a close eye on China to see how this round of stimulus packages takes effect.

Thinking about switching your investment options?

A Super Adviser can help you assess what option is right for you based on your unique situation and goals. You can speak with an adviser over the phone or face to face at no additional cost.

More info you might be interested in

Investment performance

Can’t get enough of the numbers? Take a look at all our performance figures

How we invest

Our safety-first investment ethos guides how we manage and grow your investments

Investment options

Discover our range of investment approaches, tailored to your financial goals