In our last update, we noted that financial markets seemed set for a period of turbulence – and that’s exactly how it turned out. After months of strong growth, share markets around the world fell sharply in the December quarter, giving up many of their previous gains. That pushed down returns across the board – especially in higher growth options, which have a higher allocation to shares. But our portfolios are designed to cope with market volatility and include defensive assets that act like stabilisers when share markets are volatile and negative. Importantly for your money, these stabilisers helped all investment options maintain positive results over the year.
While we don’t like to see falling share prices, it’s good to know that our safety first approach has continued to responsibly manage the downside exposure of your money when markets are falling. While markets have had their ups and downs over the past year, all our investment options remain in positive territory for the 2018 year.
Annual returns to 31 December 2018
All returns are per annum and after investment fees.
- Annual return
Past performance is not a guarantee of future performance.
Will the market recover?
While no-one knows how markets will behave in the short term, there are good reasons for optimism about the future. History tells us that it is not unusual for share markets to fall 5%–10% from time to time, and by even larger amounts when markets are stressed . And according to the forecasters from the International Monetary Fund, economic conditions look set to remain fairly positive, both at home and overseas. So while there will inevitably be events that cause markets to continue their ups and downs (for example, Brexit), the long-term outlook appears favourable.
Thinking long term
When markets are falling it can be tempting to change your strategy – but often it can make more sense to stay invested, or even invest 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.
All of our investment options (excluding the Cash option) are invested for the medium to long term. That is, they aim to achieve their return objective over 3 to 10 years periods. Pleasingly, all our investment options are beating their return objectives as at 31 December 2018. As Glidepath was established on 1 October 2015, only three year returns are available for this investment option.
Taking the long-term view is a strategy that ensures you can wear the turbulence of shifting markets while remaining confident in your financial future. No one can predict the future, but smart investors know that a robust investment strategy that is consistently implemented, is much more likely to achieve its objectives over a longer period.
Your investment options are meeting their long-term objectives
As at 31 December 2018 – all returns and objectives are per annum and after investment fees.
|Investment option||Return objective||Actual return||Return objective||Difference|
|Glidepath: Take-Off||CPI +5% p.a. over 10 years||7.1% (3 year p.a. return)||6.9%||+0.2%|
|Glidepath: Altitude||CPI +4% p.a. over 7 years||6.1% (3 year p.a. return)||5.9%||+0.2%|
|Glidepath: Cruising||CPI +3.5% p.a. over 6 years||5.7% (3 year p.a. return)||5.4%||+0.3%|
|Glidepath: Destination||CPI +3% p.a. over 5 years||5.1% (3 year p.a. return)||4.9%||+0.2%|
|Aggressive||CPI +5% p.a. over 10 years||8.3% (10 year p.a. return)||6.8%||+1.5%|
|Growth||CPI +4% p.a. over 7 years||7.9% (7 year p.a. return)||5.9%||+2.0%|
|Balanced||CPI +3% p.a. over 5 years||5.2% (5 year p.a. return)||4.9%||+0.3%|
|Conservative||CPI +2% p.a. over 3 years||4.0% (3 year p.a. return)||3.7%||+0.3%|
|Cash||Bloomberg AusBond Bank Bill over 1 year||1.9% (1 year p.a. return)||1.5%||+0.4%|
- Glidepath: Take-OffReturn objectiveCPI +5% p.a. over 10 yearsActual return7.1% (3 year p.a. return)Return objective6.9%Difference+0.2%
- Glidepath: AltitudeReturn objectiveCPI +4% p.a. over 7 yearsActual return6.1% (3 year p.a. return)Return objective5.9%Difference+0.2%
- Glidepath: CruisingReturn objectiveCPI +3.5% p.a. over 6 yearsActual return5.7% (3 year p.a. return)Return objective5.4%Difference+0.3%
- Glidepath: DestinationReturn objectiveCPI +3% p.a. over 5 yearsActual return5.1% (3 year p.a. return)Return objective4.9%Difference+0.2%
- AggressiveReturn objectiveCPI +5% p.a. over 10 yearsActual return8.3% (10 year p.a. return)Return objective6.8%Difference+1.5%
- GrowthReturn objectiveCPI +4% p.a. over 7 yearsActual return7.9% (7 year p.a. return)Return objective5.9%Difference+2.0%
- BalancedReturn objectiveCPI +3% p.a. over 5 yearsActual return5.2% (5 year p.a. return)Return objective4.9%Difference+0.3%
- ConservativeReturn objectiveCPI +2% p.a. over 3 yearsActual return4.0% (3 year p.a. return)Return objective3.7%Difference+0.3%
- CashReturn objectiveBloomberg AusBond Bank Bill over 1 yearActual return1.9% (1 year p.a. return)Return objective1.5%Difference+0.4%
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.
We're here to help
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