Watch the FY 2019-20 Annual Member Meeting recording
If you weren’t able to make the Annual Member Meeting or just want to recap on the updates, you can watch the event recording below.
The following is the output of transcribing from an audio recording. The transcript has been included to make the video accessible to people who are deaf or hard of hearing. Although all reasonable attempts have been made to ensure accuracy of the transcript, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors.
Good evening and thank you for joining us for Sunsuper's 2019-2020 annual member meeting. My name is Georgie Williams and I'm a Director on the Sunsuper Board and I'm delighted to be your Emcee for tonight. As our event is anchored from a business-based studio, I'd like to begin with a welcome to country by the Yuggera Toorabul people.
(Aboriginal language spoken).
Ladies and gentlemen, welcome to our ancestors' homeland, the land that we call home for over 65,000 years. The Turrbal and Yuggera Aboriginal people of Brisbane City.
Quandamooka people, welcome. Gumby Gumby people, welcome. Turrbal, Yuggera, Wikame..
(Chanting). (Bird sounds made). (Didgeridoo in background).
(Aboriginal language spoken). (Aboriginal music and singing).
Welcome.
I know many of you will have joined us in person for our last member meeting in Brisbane. I don't think any of us can believe that was only in February of this year. It's been an astounding, confusing and emotional roller coaster at best, and at worst, many of us have had our lives turned upside down. I'm talking to you from my hometown of Melbourne, which I share with over 140,000 Sunsuper members, and as a mother of two daughters, I can tell you even if this year hasn't shattered us, it has changed us.
One thing that brought me great comfort this year is that thousands of hours we spent making sure that all we did right across Sunsuper was only to consider member impact, the impact on you, and tonight I'm very happy to be speaking directly to you, so that we can share with you all that we've done and for so many members to be able to join us remotely.
So it all hit in March. Our TV screens were full of CentreLink lines, job losses, fear and confusion about an uncertain future, and during that week we had to move all of our staff offset and our investment team alone logged thousands of hours with the best managers around the world to monitor and manage every one of your investments 24 hours a day.
For your part, I know some of you in those first few days, held on to our phone lines for up to 40 minutes to speak with us and ask for our help with what to do next, at a time when your worlds were being blown apart. I can't thank you enough for your patience, during what was a horrible time for you, and allowing us in a matter of a few days to stand up our remote workforce.
But a part of your Board and Executive, we realised that this year we not only had to think about your tomorrow, we had to think about your today, and let me tell you that truly galvanised us as an entire organisation. Within a day we knew that when you needed your money, we were going to be there, and perversely from this far apart I've never felt closer to our team and in front of you, our members, I want to personally thank all of our staff and tell you how proud they made us.
Right across our organisation we took a huge number of decisions to secure, protect and grow your money, and that meant making some really hard decisions about expenses and that started with us, the Board, who unanimously decided to take a 10% salary cut to the end of 2020 and a salary freeze for Directors and Senior Executives this financial year. In addition, our Senior Executives are not taking a bonus in full year 2020.
As the impacts of COVID became more apparent, Senior Management worked with all staff on many more responses, which resulted in our staff voting themselves to forego their scheduled salary increase this year. This was an agreed increase in enterprise agreement, so no small ask. It was one of the moments I would like to think our staff from the bottom of my heart.
Together at every level of Sunsuper all of these actions showed us and you, we're not just any financial services company, we are your company and we will fearlessly guard your future. With all that we did, each and every Sunsuper member lived our mission of members first in a very real way this year. Now, we'd like to share a video that may help you to see some of the things that we have been up to as well this year.
We're really proud to be part of Sunsuper. We have moments, such as those earlier in the year, when we rallied really quickly to the early release payments. We responded quickly and we were the front runner in a whole range of APRA measures, in terms of speed to having payments to our members in need and that made me really proud to be part of it, not only the team that delivered that, but part of Sunsuper for the whole of organisation effort together.
What makes me proud to work for Sunsuper is having the opportunity every day to support our most vulnerable members and their families when they need to claim on their insurance. We make a difference to many lives every day.
Welcome back. So tonight's event will be in two parts. Firstly, we'll have updates from our Chair, Andrew in Brisbane, and our CEO Bern and Chief Investment Officer, Ian from Sydney, and that will take just over half an hour, and then we'll answer your questions, and thank you to those of you who submitted your question prior to tonight. But during the webcast tonight you can also click on the little speech bubble on the bottom right side of your screen to ask a question at any point in time or just provide us some feedback. I know the team would love to hear from you.
Please be sure to include your name and email address along with the question and we'll try to answer as many of your questions as we can live, but if we don't get a chance to answer them all, we already have quite a few, pre-submitted, we'll be publishing all questions and answering them online in the coming weeks. We won't answer through the broadcast, any questions that pertain to your personal financial situation, for example, something very specific to your account. We can answer those questions directly to you and for those questions we have a live chat function.
So if you've got one of those questions on your own situation, please click on the "i" icon on the right-hand side of your screen and from there you can select "Member Inquiries" or request a call back and one of our team will be in touch.
We also have the rest of our Board of Directors and members of our Executive Leadership Team for the broadcast, so they'll also be available to answer any specific questions during the Q&A. And, finally, the legals. I need to let you know that the information we're providing tonight is known as general information only. It's about Sunsuper as a whole and doesn't take into account your personal specific circumstances, such as your individual investment objectives or financial situation.
And now I've done that, I'd like to introduce Andrew Fraser, the Chair of Sunsuper, who's going to provide an update on the funds strategy. Andrew was appointed as an Independent Director of Sunsuper in September 2015 and he was appointed Chair in February 2018. In a past life Andrew was a Treasurer and Deputy Premier of QLD and he's now on the Board of Watpac, New Zealand Rugby League, 3rd Space and the Hear and Say Centre. He's also the Chair of Motorsport Australia and Orange Sky.
Andrew has worked tirelessly this year for Sunsuper, not only has he spent a huge amount of time leading across the issues I've already touched on, but he also spent time on the phones in the member centre during March and April, making sure we knew exactly what you were dealing with and what we needed to do. His commitment to you and his commitment to Sunsuper this year was immense. Please welcome Andrew.
Thanks, Georgie. I, too, wish to acknowledge the traditional owners of the lands on which we gather tonight. Those lands are potentially as far and as wide as the modern nation and as diverse as the various Indigenous inhabitants whose original and enduring kinship with that land I want to acknowledge and respect.
Welcome to all of you, to this annual members meeting for your fund Sunsuper. It is, in fact, the second meeting we've held and the second this calendar year. We welcome the opportunity to report and the accountability to you, our members, the beneficial owners of the fund. When we planned to hold this event we were expecting something very different.
We planned tonight to be a physical meeting and booked the Brisbane Convention Centre with an online facility just for those unable to attend. Well, things are different. We certainly didn't expect also to be on the State of Origin night, and for those of you joining us from the nonrugby league states, there's many weird things about 2020 and a November Origin Series is just one of them. Nevertheless, wherever and however you are participating, welcome.
2020, of course, has shaken many certainties and presented enormous challenges. When it comes to what we do for you, growing and nurturing your retirement savings, that task was made more difficult in a year in which one of the most significant, economic dislocations has befallen not only Australia, but the globe. I don't want to make excuses for the reality of negative returns for the 2020 financial year. I do, however, want to acknowledge two fundamental points, which will be addressed further by the CEO and CIO in the coming moments.
First, markets are cyclical from day-to-day, month-to-month and year-to-year. Some days are down days and they're followed by up days and in a world of uncertainties it remains some years will be down while others will be up. Secondly, but more importantly, we're investing for you for the long-term. You don't retire every day and retirement should be planned to be both long and happy. So we need to invest on your behalf with that long-term perspective in mind.
It is painful for me and for all of us to report to you on a tough year, but I see my job, and that of the Board of your fund, to oversee a capable and skilled management team, who we know has the capacity and a proven track record to deliver those strong long-term returns. So despite the challenge of last year, we still maintain a track record of delivering returns in our flagship balanced diversified fund that exceeds benchmark returns, delivers on our promise to you and beats the industry average. We intend to continue to apply ourselves to that central task today, tomorrow and well into the future. We value the trust you have in Sunsuper and take seriously our responsibility to you and your retirement savings.
Finally, I wanted to touch briefly on the potential merger with QSuper. This has been a matter canvassed in the public arena and, indeed, discussed at this forum earlier this year. The report to you tonight on that front is that we remain in detailed discussions with QSuper and we're committed to providing you with a further update in the coming months. COVID has slowed progress somewhat, but it's not changed the central point, and that is we will only proceed with a merger if we can identify and be assured that the merger is in the interests of Sunsuper's members today and into the future.
A larger merged combined fund will potentially have the scale and capacity to achieve better outcomes, harvest efficiencies of scale which can mean better returns and draw upon the combined resources of a larger fund to deliver better services to you as you plan and enjoy your retirement. That's the opportunity of the merger and I look forward to updating you as soon as we reach a decision.
For now, thank you again for joining us and I'll hand back to our Emcee Georgie to introduce Bernard Reilly.
Thanks, Andrew. I'd now like to introduce Bernard Reilly, Sunsuper's Chief Executive Officer, to talk to you about Sunsuper's achievements over the past 12 months and our future plans as well. Bernard has been with Sunsuper for just over 12 months and what a baptism he's faced. Bern's had extensive global experience both here in Australia and internationally in banking and finance.
Prior to joining Sunsuper, Bern was a member of the Board Investment Committee at NSW Treasury Corporation and he also had 25 years experience with State Street Global Advisers, most recently in Boston and Sydney, in the role of Executive Vice President, global Head of Strategy. This year Bern has led our team with courage and commitment and it's been a pleasure to hear directly from staff that felt directly supported by Bern in times of incredible pressure, but also to see Bern courageously tackle the issues that secured your savings.
I've worked in this industry for many years and it's a rare combination to have a CEO with both great technical expertise, as well as the empathy and courage Bern displays. We're very lucky to have had Bern leading us through this year. Over to you in Sydney, Bern.
Thanks, Georgie, good evening. I'd like to add my welcome to you and thank you for joining us online tonight. As Andrew has already mentioned, when we held our inaugural member meeting in February this year, none of us predicted the challenges that lay ahead. I can tell you it wasn't the year I was expecting when I joined Sunsuper, but it was a year that I got to know more about our organisation than I otherwise would have and it is reinforced to me that as a member you are well served by the team at Sunsuper.
I want to, firstly, reassure you that throughout the significant health and economic challenges that the world has faced over the past nine months or so, our focus at Sunsuper hasn't wavered. The team has continued to come to work each and every day, although a little bit differently than last year, to safeguard your super savings. Everyone has been extremely focused on doing our part to help you when you needed us and making engaging with us as easy and as straight forward as possible.
When COVID first hit earlier this year our initial focus was on helping you better understand the impact market volatility had on your super investment and once the government announced its COVID early release and super measure, we quickly worked hard to ensure that the money was in your hands as quickly and as seamlessly as possible if you needed it. And on both fronts I'm incredibly proud of the work of the Sunsuper team.
We quickly hired and trained 74 new temporary staff members in our contact centre to answer your calls and respond to your queries, all 270,000 of them. We kept you up to date and helped you understand the likely impacts of market volatility and the details of the government early release measure. This included sending out almost 5.5 million member emails, having almost 750,000 of you visit our dedicated online information hub and having more than 18,000 of you dial into one of our live or recorded webcasts.
And I'm proud to say that for those of you that needed it, we made it as easy as possible for you to access your super money. We were recognised as a leader in the industry in the average time we took to pay members early release claims. In the first tranche of the scheme to the 30th of June this year, we paid out $1.9 billion to close to 272,000 members, with 90% of those payments made within three business days and 99.6% within the ATO's recommended five business days.
So far in tranche 2, we have almost had 200,000 requests and paid out over $1.4 billion. All of this we did in the midst of moving our entire team to remote working. Andrew has already mentioned our 2019-20 investment performance, and I'll leave it to Ian Patrick, our Chief Investment Officer, to speak in more detail, but I did want to highlight that despite the sharp downturn in economic activity during the March quarter, due to COVID, our performance rebound in the June quarter and our long-term returns remain strong.
I won't hide the fact that we are disappointed to see negative returns for the 2019-20 year for our balanced option but, no, we expect to see negative returns once or so in every 10 years, but that still doesn't sit well with us. Super is a long-term investment and we accept that some years will be lower, possibly negative, with an aim to achieve strong long-term returns, and with returns of 6.5% per annum over the last five years and 8% per annum over the last 10 years to the end of June, our balanced investment option, which most of our members are invested in, comfortably performed better than the industry average over three, five, seven and 10 years.
To add to this though, we know that to maximise your super balance strong returns need to be accompanied by low costs and so I'm pleased to see that fees remain amongst the lowest in the industry and, as always, we continue to explore ways to further reduce fees that you pay us to administer your account and invest your savings. As a profit for members fund, protecting your future and the future of your loved ones is as important to us as helping grow your savings. So we strive to deliver the best products and services for you, including insurance cover.
From the 1st of October this year, we introduced a range of improvements to our insurance offering, including increasing the circumstances in which our insurer will pay a lump sum and removing some limitations to make it easier for members to get insurance cover. Challenges do bring opportunities and in 2020 technology has been central to the significant changes in the way that our teams work and the way that we deliver service to you. A financial advice offering, which we provide to members at no additional cost, has definitely come to the fore this year. In fact, our phone-based advisers have worked with over 3,500 of you in the first half of this calendar year alone. They advised you on a range of super related issues, including to ensure your investment strategy is the most appropriate for your life stage and retirement plans, given the market volatility that we're experiencing.
We also continued our ongoing investment in the systems and processes to help us work with the broader financial community, by making it as easy as possible for them to manage their clients, our members' super savings. This is simply not possible without a skilled and dedicated team, and I'd like to call out the work of our IT teams in enabling the rest of us at Sunsuper to continue to deliver for members, despite the dislocations to our working arrangements.
And while our team were focused on what mattered, it was great to receive external acknowledgment of their commitment as well. In addition to being named Super Ratings 2020 Fund of the Year, we were awarded Chant West Fund of the Year for 2020 and that was the third time we'd received that award in the past four years. The Chant West Award recognises a fund with outstanding performance in member services, financial advice, investments, insurance, fees and overall organisational capability. Chant West also awarded us Best Fund Member Services for 2020, and that's the sixth time that we received that award in the last eight years. And just last week Super Ratings awarded us their 2021 My Choice Super Award.
While I am speaking on the external environment, it would be remiss not to mention the three key announcements in relation to super and super funds in the recent Federal budget. Firstly, the proposed stapling of a member to their super fund unless they make a choice. What stapling will mean is that in the future you won't have more than one account, unless you choose to do so. Secondly, the government also announced a new tool, YourSuper, to allow you to compare the performance of super funds, along with an annual performance test for MySuper products. And, lastly, additional requirements for funds to meet in criterias acting in the financial best interests of members.
A key priority for us in the next 12 months will be to monitor how these announcements progress, but from our perspective we welcome reforms which improve efficiency, transparency of the superannuation system. However, our main focus for the year ahead and beyond is firmly on you, our members. Sunsuper largely achieved its 2020 vision that we set in 2015, in particular, to be one of Australia's top 10 funds by net assets, to deliver strong long-term investment returns and to be respected in the industry and celebrated as a great place to work.
So we've set ourselves an even bolder vision for the next five years to 2025. This vision will help all of us at Sunsuper focus on delivering world class investment management and distinctive member value, driving industry leading scale and becoming a top five fund. But what that really means to you, as a profit for member fund, is that you can take comfort knowing that everything we do day in and day out is in your best interests and everyone at Sunsuper, from our investment managers, our financial advisers, staff in our contact centre, to those in the back office, risk and compliance and our HR teams will all be working hard to fulfil our purpose, which to inspire and empower you to fulfil your retirement dreams.
I would like to just touch on five of our top priorities as a team for the next 12 months. Firstly, to the end of this calendar year we'll continue to support members accessing early release and make sure that we get funds paid as quickly as possible. We'll build on our investment capability and ensure that we're well positioned to take advantage of investment opportunities within the market. We'll reinvest in our technology improvements to deliver better services to you, as well as our employer clients and financial advisers that we work with on your behalf.
We'll continue to focus on making it as easy and as smooth as possible for new members to join Sunsuper directly. And, lastly, as I mentioned, we'll prioritise the strategic shifts we may need to make in order to respond to the Federal budget announcements, and obviously we'll continue to explore the potential merger with QSuper.
Thank you again for joining us tonight and now I'd like to hand back to Georgie.
Thank you, Bern. I'd now like to introduce Ian Patrick, Sunsuper's Chief Investment Officers, who's led our team of investment professionals, the ones who were responsible for securing and growing your future. Ian has decades of experience in the institutional investment industry and Ian joined Sunsuper as Chief Investment Officer in November 2015. Prior to joining Sunsuper he held the position of CEO at JANA Investment Advisers.
These years come about very rarely but they test the metal of the team in ways you can never predict and it's years like this that experience counts and let me tell you Ian has experience in spades, both in managing the investment team but also his steadfast mindset to manage through a crisis with only your long-term savings in his mind. His team logged more hours than I could count and they were constantly testing themselves and your portfolio, as well as engaging with the world's best investment managers to find opportunities that will benefit you in the future. Their commitment and Ian's leadership should make us all proud to be with Sunsuper. Welcome, Ian.
Thank you, Georgie, and good evening, everybody. It is my pleasure to talk to you this evening about the performance of the Sunsuper portfolio. Before I do let me say personally and on behalf of my team, that it is a privilege to have the responsibility to invest the savings that you have entrusted to Sunsuper. I would like to thank those members who submitted a question prior to this evening. It is unsurprising that a majority of those questions address investment topics and so they have helped shape the comments that I will make tonight.
In summary, the questions were predominantly about the outlook for future returns and how we go about investing on your behalf, including consideration of environmental, social and governance criteria. In addition, I will start my presentation by recapping the portfolio and how it fared in 2020, in one of the most extraordinary investment periods I have witnessed, as well as how that performance sits in the longer term context.
I will anchor my comments this evening on the balanced option. As Bernard said, most members of Sunsuper, including me, are invested in the balanced option. I recognise that some of you joining the broadcast may well be invested in other investment options, but my comments translate to those options too in principal. The balanced option invests in a diversified portfolio of growth and defensive assets and is designed to grow member balances at a rate exceeding the rate of inflation in the long-term.
It also aims to moderate the volatility of returns in market downturns. That diversification served its purpose as market suffered deep declines in March 2020, although to be clear and straight forward, we are disappointed not to have done a little bit better for you in 2020. That disappointment is not intended to imply that I think the impact on investment returns from COVID and the global recession that followed could have been avoided. As I said a moment ago, the portfolio has exposure to growth assets deliberately to grow your savings at a rate faster than inflation and growth assets generally exhibit weak returns in a recession.
In my disappointment, I also have to remind myself that we have seen one of the greatest pandemics since the Spanish Flu of 102 years ago. The greatest economic contraption since the Great Depression, which ended 80 years ago. At one point probably the greatest oil price decline ever and the greatest central bank and government intervention of all time.
The balanced option had a return of -1.7% for the year to 30 June 2020. It was the first negative performance for the balanced option since the 2012 financial year. A negative performance year is quite within the realms of possibility, as Andrew Fraser noted in his opening remarks. The Sunsuper Investment Guide indicates that the balanced option would be expected to have approximately four negative years in a 20-year period.
The chart shows the annual returns over the prior 10 financial years. This is only the second time the financial year return has been negative in the last 10 years and both of those have been very small negatives in contrast to mostly strong positives. It is pleasing indeed that performance has recovered since 30 June, sitting at 2.7% for the four months from then, but it still leaves me a little disappointed that we didn't do better earlier in the year.
A decision to invest in the balanced option should not be made a year at a time. This chart shows the aggregation of the annual returns over longer periods. As you can see the strong positive returns offset the occasional negative years to deliver returns well in excess of inflation. Despite the test of the COVID period, it bears reminding that the last 10 years have seen returns significantly above expectations.
In 2010 the guidance provided to members was that the balanced option would aim to generate a return of 4% above the level of inflation, the height of the blue bar on the chart. The excess over inflation is what we call the real return. What emerged in practice, including the COVID period, was a real return not 4% above inflation but 6.2% above inflation.
The last piece of longer term context, before I get to some of the back drop to recent performance, is this chart. Investing $10,000 in the balanced option at the start of the year 2000 would have generated a balance at 31 October 2020 of approximately $40,000. The full period includes the dot com bust episode, the global financial crisis and more recently the COVID period, and still the value of the balanced option investment beats inflation by well over 4%.
Also note that in contrast to the time taken for investment values to recover after the global financial crisis in the late 2000's, the recovery in values after COVID has been rapid. It took almost five years to return to the same dollar value as just prior to the GFC, whereas the balanced option has already recovered nearly three quarters of the value decline from the peak at the end of January.
The Sunsuper balanced option includes a broadly diversified mix of traditional and alternative assets, designed to optimize the trade-off between seeking returns whilst moderating volatility and generating an acceptable level of risk. Amongst traditional assets, bonds and cash are seen as defensive. That is, they tend to provide a positive return when share markets are weak.
For a number of years now, our challenge in deciding how much to allocate to bonds and cash has been the exceedingly low reward these assets would generate for members over the medium to long-term. Just a year ago had you invested in an Australian Government bond for 10 years, it would have guaranteed you a return of just over 1% over that period and not exceeded in inflation. For that reason, amongst others, we invest in a range of alternative assets with defensive characteristics, unlisted property, unlisted infrastructure and private debt strategies.
Keeping in mind that allocation to different assets, how the different listed markets performed over the financial year explains the performance of the balanced option. With just short of 50% of the balanced option invested in shares, Australian and international, the weak returns from those markets was a dominant influence. To highlight the impact, Australian shares returned -7.6% over the 12 months to 30 June 2019, as shown in the chart, but 11.4% in the 12 months before that. It is unsurprising that shares experienced weak performance, given how severe the downturns have been in economic activity. Fortunately we do not make allocations to real estate investment trusts or REITS, which have been especially poor performers.
Recall that we have allocations to both unlisted property and unlisted infrastructure in our portfolio, the returns for these assets were between shares and bonds, as broadly anticipated. Sunsuper's unlisted property assets returned -0.6%, placing them just to the left of cash in the chart, and unlisted infrastructure returned 1.9%, or slightly better than hedge developed market shares. Unlisted property and unlisted infrastructure delivered good diversification, as I noted at the start, but weren't as diversifying as bonds in the environment.
The 12 months to 30 June consisted of quite distinct periods, if one looks at the first seven months versus the next five. The first chart shows the values of investments in different asset classes, assuming you invested in 100 at the start of February 2020. Investing in a 10-year US government bond is especially identified. It was the only meaningful positive performer and it was the dominant defensive asset over that period with a return of some 10%, with most of that return coming in the month of March 2020 when share markets cratered.
This next chart extends the return patterns back to 1 July 2019, so that they end with the same 100 at the start of February to align with the previous chart. One thing to notice here is how much more tightly returns of the different asset classes are bunched in the period prior to February, when compared with the period afterwards. It is good practice to examine strategy after a market event like we experienced in March, in particular, to examine the role of alternative investments and their defensiveness.
Unlisted assets have delivered long-term value as part of the balanced option strategy through strong returns and reduced volatility. This shows the long-term return for each of our unlisted asset classes, property infrastructure and private capital. Whilst they declined in value due to the COVID episode, the declines were not near as much as they were for shares in the dotted line and values of these assets have already shown some recovery.
The cash flows generated by some of these assets were temporarily impaired, as with many businesses. The impact on shopping centres, CBD offices, airports and assets affected by the mobility of people in general is well-known. On balance, we are pleased with the resilience of the assets in our portfolio. They have shown they do have strong balance sheets and experienced managements and despite the uncertainty ahead with respect to full resumption of normal economic activity, they still represent unreplaceable assets and they are key to their respective economies. Furthermore, the impacts on cash flows from COVID are reflected in the value we hold those assets at today and they offer sensible value going forward, when compared to shares and bonds.
I am now going to transition from looking in the rearview mirror and spend a few moments in here and now topics. Firstly, some recent investments and then a bit about how we invest from an ESG perspective. COVID has accelerated transformation in several sectors of the economy. Pleasingly we have been in a position to continue to invest to benefit from some of those.
Forest logistics is a property investment focused on the development and operation of large modern industrial warehouse facilities in key Chinese cities to benefit from the tail winds of an increase in eCommerce and third party logistics. Historically this has been a very fragmented market in China with a shortage of world class facilities. The energy transition fund recognises that most new energy capacity will be in renewables and gas and that will require significant investment over the ensuing years to 2050.
South Eveleigh is a recently completed asset and had its official opening in the midst of COVID, as is evident from this picture. It underscores the point that I made earlier about the unreplaceable nature of modern energy efficient and flexible office space that will continue to be important to companies into the future.
As Georgie, Andrew and Bernard each noted, it feels like a lot has changed as a result of COVID. One thing that hasn't changed is that consideration of environmental, social and governance, or ESG criteria, is central to investment decisions and the ongoing management of assets in the Sunsuper portfolio. Sunsuper's approach to responsible investing is comprehensive and you need only look at the responsible investment report on our website to see that.
As you will see from this slide, the range of ESG issues is meaningful and their relevance to different investments is varied. The list on the slide is by no means exhaustive. It is reflective of how we currently organise and prioritise our activities in terms of the social licence to invest framework adopted by the investment committee. As a general principle, we seek to influence change at companies through a program of engagement with their managements and Boards and through exercising our rights as owners through voting our proxies. We're sensible. We join in collaborative research and engagement programs to ensure our voice has the most effective impact.
Focus on the approach of investors to climate change is ongoing. Since I spoke to you in February, we have formally adopted a comprehensive plan to mitigate the financial risks posed by climate change and to take advantage of opportunities as the world transitions to a low carbon economy. We believe that the worst impacts on your portfolio will be avoided, if we recognise in our investment approach that the world will increasingly see limiting warming to 2 degrees below pre-industrial levels, as the basis on which policy will be determined and economies will be structured. Therefore, we have adopted a target of getting the portfolio to a net zero emissions level by 2050. Getting there includes a range of actions, amongst which will be changes to the portfolio and pursuit of opportunities in green buildings, renewable energy, green bonds and new technologies that meet our risk and return criteria.
In this last segment of my presentation I want to turn to the forward view. The severe and sharp impacts on global economic growth from COVID and the central bank and government policy responses that followed are truly unique in history. Impacts to global economic activity have largely been in line with the extent of infections and the restrictions imposed to limit health impacts. It is no surprise that Spain and the UK experience contractions in their economies of greater than 20% in the June quarter when compared to December 2019. Whilst Australia's contraction was less than 10%.
While most economies are predicted to show a strong rebound in economic activity after the severe lockdowns of the first half of 2020, most are projected to still be below their 2019 levels of economic output at the end of 2021. The lighter bars indicate the forecast level that different economies will be operating at in December 2021, when compared to December 2019. Again, it is probably not surprising that a country like Spain, with a high reliance on tourism, is still reasonably weak at that point.
The pathway to a recovery for a country will depend on a range of factors. Looking at the top group of factors here the extent and duration of support governments provide to individuals and businesses will be important. Firstly, spending only recovers if people have income to spend. Secondly, assurance of support is key to confidence and individuals and businesses will only make future plans if they feel a degree of confidence. Infection control success is also key to confidence to get on with resuming normal activities and hence progressing return of economic growth. Lastly, I mentioned Spain, in the context of a badly affected industry.
We also need to remember that investment markets look to the future. They incorporate future expectations into today's prices. Therefore, it will be surprises that matter to investment market outcomes and the more frequent and sizable the surprises, the more volatile markets will be. We have witnessed some of that recently with the bouts of optimism and pessimism surrounding the outlook for a vaccine and a further round of government support in the US. Furthermore, given the potential variation of outcomes from here, we should expect surprises and hence ongoing volatility in markets.
As a final comment on this slide, you will note the US election doesn't feature. History shows us that speculation about the outcome and any surprises that result do cause some volatility in the near term, but a given election has a very limited impact on the medium-term economic growth trajectory and on markets.
Government bond yields are at near all-time lows and on negative in some countries. That does not bode well for long-term returns from fixed income investments. Whilst we will continue to hold some government bonds for ultimate defensiveness, we continue to believe that a portfolio of thoughtfully diversified alternative assets offer a much better risk reward trade-off in the medium term.
One thing that does cause us some pause is the valuations at which some share markets are trading. After the sharp rebound from the March lows. An over simplification might be to say that those markets are pricing in a rapid return to prior economic activity, or alternatively they have high levels of certainty about the passive of a vaccine or the removal of restrictions.
Nevertheless, we still feel that shares are meaningfully more compelling an investment opportunity than bonds over the medium term. However, we don't want to concentrate risk in particular areas of the share market. Whilst COVID has clearly been better for tech than tourism, this chart shows the sheer divergence in the performance between the five mega tech stocks at the top of the benchmark index for the US market, the S&P 500 and the remaining 495 stocks in that index. Our preference is to maintain broadly diversified exposures to Australian and international shares.
In closing, I want to acknowledge that this year has unquestionably been a challenging one for you as savers, as much as it has been for us as investors. I cannot even guarantee you that the worst of this is behind us. However, I do know a number of things. Firstly, for the most part investing is a multi-year and even multi-decade activity and strong portfolios of good assets have been shown to deliver effective returns over those periods.
Secondly, occasional negative returns are to be expected in the cycles of long-term investing. Third, whatever the cause of the crisis that leads to market volatility, in this case a global health crisis, economies do recover and investment markets reflect that, often in advance, leading to recovery of returns. Staying the course through the cycle is most often the best approach. And, fourthly, crises do bring opportunities and capable investors with strong liquidity can take advantage of those opportunities.
Finally, I can assure you that I and the rest of the investment team at Sunsuper will continue to manage your retirement savings with careful stewardship to achieve the long-term returns necessary for you to meet your retirement goals. We never lose sight of the fact that we are managing your, our members' retirement savings, and in challenging times like these you can trust us to be working tirelessly so that you can sleep well at night.
Thanks, Ian, and now it's time for your questions. So alongside the panel, that includes Andrew, Bern and Ian, we're also joined by Liz Hallett, who is the Chair of our Audit and Risk for the Board. Bored. Liz was a Partner with international law firm Norton Rose Fulbright for 22 years and she's now a professional Director and brings deep legal, regulatory, corporate governance and risk management skills to the Sunsuper Board. As you've heard, we moved pretty rapidly this year to implement a number of systems and processes, and alongside the risk function, Liz ensured not only we move quickly but that you were fully protected along the way. Thanks so much, Liz.
Also, we have our full team of Directors here and members of our Executive Team, our Fund Actuary and our Auditors from Deloittes also join us. Just a reminder that you can submit your question or comment now using the speech bubble located on the bottom right of your screen and just include your name and address with your question, so we can provide you a personal response if we don't get to your question tonight, and remember if it's a personal request, in terms of your own situation, just use that "i" icon.
Okay. So we're up for the first question and the first question goes to Liz. Liz, this is a question from our member Nia. Nia says, "There's been a lot in the news about some wrongdoings at really big companies, Rio and AMP. What does Sunsuper do in relation to corporate governance from the top to the bottom and how do you implement?"
Thanks, Georgie. That's a really important question and corporate governance is something that I am personally very passionate about and good corporate governance is very important. At a Board level, we are very active in our oversight of corporate governance in the organisation and we work really hard to set the tone from the top. We explain to the organisation what our expectations are about good corporate behaviour. We also work really hard to encourage an open culture where people feel safe, to be able to speak up when they identify issues.
I say to the team when I talk to people, "You can lose one night's sleep over a problem that you're worried about, otherwise speak to someone you trust", and we check in with our people on a regular basis. Historically we would walk the floors, now we talk to people via Zoom and Teams and we're looking forward to being able to check in with them by person again. So corporate governance is something that we take very seriously and we actively manage.
Thanks, Liz. So our next question I'm going to throw to Ian, this question comes from David and David's question is, "In these uncertain times, and in the face of low interest rates, what's Sunsuper doing to develop innovative options for the controlled delivery of retirement income?"
Thanks, Georgie. David calls out two things that I think are important to get out early and that is the aspect of low interest rates and the aspect of uncertainty. With respect to low interest rates, it used to be the case in those good old days where one could invest in a term deposit and live off the interest, such was the level of interest paid on term deposits. Those days are long gone and as a consequence the source of the question is entirely valid.
The second piece that's important is the uncertainty, because it's also a well-established fact that in circumstances of uncertainty people are reluctant to draw down on capital because they are worried that future capital might not sustain them through a full retirement and we're very conscious of that. My response to the question would be, at the end of the day it's total returns that matter and on a forward looking basis, as we think of a diversified portfolio like, say, the retirement option, shares should, over the medium to longer term, deliver mid to high single digit returns.
If we look at our infrastructure and private - and unlisted property portfolios today, they also have prospective returns in the high single digits. If you are invested in a diversified portfolio of that nature, the anticipation is you'll be able to derive sufficient return to both draw off an income and see through at least the first few years of retirement continued growth of capital. That isn't to say it will happen in a straight line, and I don't want to pretend that's the case.
The last two comments I'd make is that structured delivery of income often comes at a cost. There's a structure built around the investment to deliver that certainty of income and that often turns out to be costly for members, and so we think a well diversified portfolio at the end of the day is the best approach, as you might expect, and the last comment in closing would be, I can only reflect on the general. Anybody considering their circumstances, particularly the rate of income they need to draw down and what their aligned goals are, should seek financial advice.
Okay. Great. Thanks for that, Ian. Our next question goes to Bern. Bern, this has just come in from Caroline and Caroline is asking about the annual performance test for super funds and how we deal with underperformance when you can't accept new members.
Thanks, Georgie, and Caroline, thanks for the question. It's early days on that measure. As I mentioned in my remarks earlier, they were announced in the budget just recently and so we're actually waiting to see what some of the final details of the annual performance test will be and the impacts of that. We expect we're going to hear something in the next couple of weeks, at least before the end of the year.
It's important though, I think, to reflect that from a Sunsuper perspective, as I mentioned earlier as well, we support transparency and accountability for superannuation funds. So any of those measures that are put in place, we believe, are a really good thing for the industry.
The other thing I mentioned as well was our long-term performance, you might recall, so I think about our returns over three, five, seven and 10 years in the balanced option were ahead of the medium - of the industry average, I should say, so I feel that we are in a strong position as we look forward and, again, we welcome the transparency in the industry. I think it reflects the importance of superannuation as a pillar in retirement savings for all Australians and so we take that responsibility very seriously. Thanks, Georgie.
Thanks, Bern. Okay. Our next question has been asked by a couple of members. I know one was pre-submitted and I think another member has asked on the night, so thank you to Morgan and Ranjit and I'm going to send this question to Andrew, this is absolutely for you, "Can you please cover the progress of the QSuper merger?"
Thanks, Georgie. As I said earlier, COVID has slowed somewhat the pace of the discussions, the detailed discussions, that we were having with QSuper, but just to repeat again, we are engaged in a detailed due diligence process with QSuper. That's covered off by the, sort of, normal confidentiality agreements that you would exchange when you're having those discussions.
What we're doing at the moment is assessing the detail of what's in QSuper to make sure that we can form a view as a Board, that there's a strong assurance that by merging will create a stronger larger fund that's better for members, as I said earlier, both today and into the future. That's work that's ongoing. It is complex. This will be the largest merger of two superannuation funds in Australia, if we do decide to proceed down that path, and so you'd expect us to be doing a lot of work in order to satisfy ourselves, given our responsibilities to you.
We are also engaged with APRA, the regulator about progress, to ensure that they're fully informed of where we are, but as I said earlier and would take the opportunity to repeat again now, as soon as we've got something more to say about that, more certain, then you'll be the first to know as members.
Okay. Thanks for that, Andrew. And our next question is for Ian. It's from Owen, "How do Sunsuper manage nonfinancial risk factors, including ESG, when determining asset investment selections and how is internal investment management performance assessed?"
Thanks, Georgie. I'm going to start - there are two, sort of, distinct questions in there. I'm going to start with the first bit about nonfinancial risks. When we think about investing, we are ultimately seeking the best financial return for members. Risks of the nature that I think this question goes to, which could be anything from poor corporate governance to poor work health and safety practices to inappropriate dealings in a conflict sense, those will all impact in the longer term the sustainability of a business and therefore undermine the financial returns generated by a business or generated by an asset.
So when we think about the nonfinancial risks of the type I mentioned, or if you remember my former remarks, the ones that were shown in that wheel of ESG activities, those are all managed with a view to the sustainability of the business and we approach it in a number of ways. One is clearly to engage with corporate managements and we have good access, particularly in Australia, to the managements and Boards of companies.
The other is to vote our proxies very strongly and, particularly shareholder resolutions but not only, we apply our minds very strongly to, and we have done all of this since 2011, when we first brought on our responsible investment management and that practice has built out effectively ever since. So it's a broad spectrum of activity focused on both understanding the issues at play and then working with companies to ensure that we draw to the attention of Boards and management, what is important to us and what we think is important to financial returns.
The second part of this question was around monitoring and managing internal investment management. Let me be pretty straight forward and say Sunsuper has very, very limited internal investment management. Our belief is that access to the best investment minds in the world is the most appropriate model by which to deliver superior returns to members, so we outsource or partner with investment managers around the globe to deliver the investment management of our members' money and as a consequence we have relatively little internal management, that which we do have is governed as closely as any other activity and probably more so that we undertake in the investment space. Thank you.
Okay. Thanks, Ian. Andrew, if you could step up for the next question. Anita is asking, "What's the difference between a profit for members firm, ie Sunsuper, and an industry super fund?"
Thanks, Anita. I think the first thing to say is that industry super funds would be categorised as profit for member funds. The critical thing about Sunsuper and other industry super funds, and indeed a range of other funds which would be classified as profit for member, such as QSuper, for instance, or Aware, is that they exist and generate only surpluses and profits for their members. There's no shareholders who are entitled to a profit. So the better we run the fund, the more efficiently we run the fund, the more money we make with your investments. That all gets returned back to the members through their stake in the fund.
So the real point to make here is that both profit to member funds and those funds identified as industry super funds are relatively the same thing, in terms of not having external shareholders entitled to a profit. That's probably the key distinction to make, in why there's two different descriptions used at different times.
Okay. Thanks. Ian, if you could step back to the microphone, please. I've got a question here from Allan who says, "According to your performance dashboard, Sunsuper underperformed versus the average over the last year. What is it about your investment strategy that drove that?"
Thanks, Georgie, and thanks again for the question. I'll try and condense the remarks in my formal presentation to the following: The dominant reason for underperformance relative to the broader industry average in the course of the year, remembering that the long-term returns have been very sound, was the nature of the defensive assets we held going into the COVID crisis and you'll remember the chart that I showed with US government bonds and the strong performance of government bonds as a defensive asset.
We have made a deliberate decision not to hold a large amount of government bonds and have preferred alternative defensive assets or alternative assets with defensive qualities like unlisted property and unlisted infrastructure. The reason for not holding bonds is the prospect of returns from those and, as I noted, those were circa 1% or not much more on a forward looking basis back a year ago.
The nature of the pandemic though was such that meaningful sectors of the economy were shut down. One only has to think of airports or retail shopping centres. Those form a part of those alternative defensive assets that I mentioned, unlisted property and unlisted infrastructure, so in the short-term they did not provide the level of defensiveness you would normally assume in a typical recession. This was not a typical recession. In a typical recession the activity or the circumstances that lead to the recession are often financial or structural in the economy. This was a government imposed lockdown, a very different recession shutdown completely. A whole number of sectors. And that undermined the defensiveness of those assets.
That's not an excuse. We aim to have a strategy that would see us through most market circumstances and we still believe that the strategy of holding alternative defensive assets is that strategy and that those assets will recover, have already done so and continue to deliver value in an environment that forward looking is incredibly looking for bonds. Thanks.
Okay. Thanks, Ian, and you may want to stay at the microphone. Please do keep submitting your questions. We do have a large number of them and I know there's still a few hundred of you waiting, so we'll get there. This question is from Errol, "Ian, can you please let us know what the anticipated returns are for the various Sunsuper investment options over the next six months?"
And in responding to Errol, I'm going to repeat a quote that I've read recently and it might sound a little trite but I think it has a lot of truth to it and that quote goes something like this, "We cannot know what the post-COVID future holds. We are still to live and create that future and so it is too with investment returns". I don't know what the future returns are, perhaps with the exception of a cash option. I could probably venture that the cash option is going to be somewhere between 0.1 and 0.2% return per annum over the next six months, not a whole lot more, but beyond the cash option it is incredibly difficult to apply any degree of certainty to the forward returns.
Now, that is not intended to be a cop-out. Short-term returns are a response to the emotions of fear and greed in markets and there is a lot of potential for fear and greed in markets over the next six months. Over the longer term, markets tend to deliver returns that reflect value. What we know today about value is that bonds, as I've already mentioned, are expensive. Equities offer a somewhat better prospect on value and unlisted assets, to us, look even more attractive than that. Whether that will come to fruition in six months or not, I cannot say.
I think one has to, unless you have short-term commitments on which you have to realise assets within the next six months, you have to take a three to five-month view at this stage. That is the level of uncertainty about near term outcomes that exist in this world, I'm sorry to say. Thank you.
Thanks, and one more for you, Ian, so don't move far. This question comes from two members, Talai and Sved, "What's your stance on cryptocurrencies and blockchain technology and will there be any opportunities to buy cryptocurrency or invest in blockchain tech through Sunsuper?"
Thanks. A tricky question. My 15-year-old son would not hesitate and tell me that I should be invested in cryptocurrency. My dispute with him is as follows: Beyond the fact that it's the avenue used by drug dealers and other criminals to money launder, but my issue is fundamentally this, there is no income generated by cryptocurrency and the factors, the fundamentals that drive its value and therefore will drive its future return, are completely unknown, or certainly to us as professional investors, and that makes it very hard to make a proactive investment decision, especially when we're acting as a fiduciary for you, our members' savings, to invest in cryptocurrency. I'm not dismissing it. I'm just saying in our portfolios I don't think it is a sensible and credible investment decision.
The question on blockchain I might leave. I think it's a transformative technology. It will have influence across a range of interesting industries, potentially into the future. It is probably an investment consideration like many others, you have to think about where obsolescence in some industries can occur and how it might drive changes in competition and therefore changes in value of different businesses, but I might leave that one there. Thanks, Georgie.
No trouble at all. Bern, would you mind stepping up to the microphone for this next question. It comes from Steven and Steven asks, "Does Sunsuper see the act of members withdrawing both lots of their super contributions as a risk to their business?"
Thanks, Georgie. I assume by risk to business you mean a risk to the fund, so I'll answer it in that regard. The answer is plainly no. We don't see that as a risk to the fund at all. I think there's a couple of different dimensions that you can look on in the risk, two of those I'll touch on, one would be liquidity. And Ian in his earlier remarks talked about liquidity and how he managed liquidity through the crisis to be able to deliver that $3.3 billion that we've paid out to date to members and I think we managed through that very well and there was talk about - across the industry about whether there was going to be some funds with some challenges and I'm pleased to say that there weren't and we were able to clearly pay money out in the short period of time that I mentioned in my discussion. You know, 99.6% of members were paid out within five business days. That's one area of risk I'd be concerned about.
The other area is sustainability, and I look at a fund like Sunsuper. We paid out $3.3 billion to date and our funds under management today stand at about $73 billion, after having paid out that $3 billion. So sustainability relates to size, as well as number of members. On the size side, clearly $73 billion positions us well still in the top 10.
As it relates to members, we have seen a small number of our members' balances go to zero, but what we've actually started to see is those members who had to take out money for early release, thankfully some of those have refound employment and they're starting to contribute back into their super fund. So I think that bodes well for their future on the members side as well. So I've put those two together, liquidity and then sustainability, I think there's no risk in a fund like Sunsuper. Thanks, Georgie.
Thanks, Bern. Our next question is for you, again, Ian, and it's from Bruce. And Bruce asks, "Will the fund performance improve over the coming years, as returns post-COVID drop but not very promising for retirees? Other funds seem to be able to recoup losses better than Sunsuper. Should I change my investment mix?"
Thank you. I think core elements of this question I've touched on briefly in previous remarks and so I'll summarise in saying, the background to the recoupment of returns post-March 2020, I think, has been dealt with and if you don't mind I'll leave that one. It goes to that question of corporate - sorry, government bonds versus other defensive assets.
The question about future returns, I think I said something along the lines of shares mid to higher single digit returns, unlisted property and infrastructure, hopefully in those mid to high single digit returns, if that's 70 to 80% of your portfolio, which is what it would be for the balanced option, you're delivering, let's say, 5% or so from that element of the portfolio. Bonds, which would be the other 20 to 30% are giving you very little, let's say that's another half a percentage point at most. You're talking about forward returns over a 10-year view of something between 5.5 and 7.5%.
Now, the danger with forecasting is the better forecasters were only luckier, and I'm not trying to be flippant and funny with that, but that's the reality, but I think the sort of level of returns we're talking about. We're not going to repeat the 10 to 12% that we'd seen through the particularly strong period after the GFC.
With respect to the question of should you change your investment mix, that's entirely dependent on your circumstances. This is the one time you should seek out those people within Sunsuper that can genuinely help you through those considerations and I encourage you strongly to do so.
Okay. Thanks, Ian. Andrew, if you could step back up in Brisbane again, we've got a question from Ian, which is similar to the one you took earlier but perhaps a little bit more specific, "When will QSuper merge with Sunsuper and what is the proposed process and outcomes?"
Thanks, Georgie, and to go to the earlier point, obviously we haven't decided to merge with QSuper. If we do make that decision then it will be a very complex transaction, given the fact that both funds are very large and the complexity that goes with that means that it will take some time. So the earliest, if we made the decision, I think at this point would be sometime next financial year but, again, that presupposes that we'll make that decision.
In terms of the process and the outcomes, the law is really clear on this. The duties that are on the Directors, as Trustees of both funds, are really clear and they can only make the decision if they have a reasonable level of assurance that the future fund, the merged fund that is created will be, in fact, in the interests of the Sunsuper membership as it stands today and, indeed, on the other side of the transaction the QSuper Board would have to form that same view.
Once those two Boards make that decision then there is a succession of one fund into the other, to use the technical term, but that's something that would be communicated to all members well in advance and, indeed, that's both the obligation and the law.
In terms of the outcomes, the thing that's extremely attractive about this concept and why we're doing the work and testing the detail of this is it would create one of the largest funds in Australia, an unquestionably strong fund that would have a tremendous presence in the Australian market and with that strength means that it's got heft in financial markets to be able to get better returns, to drive better fee outcomes, to offer better services, to put the two funds together puts two great funds together to make an even greater fund. That's the proposition that we're testing. There's a lot of things that need to be worked through. I'm trying to answer the question presupposing that we get there but I do want to conclude by what I said at the start, and that is we obviously haven't made that decision and there's a way to go yet.
Thanks, Andrew. We're going to go straight back to you, Ian in Sydney, because I've got a question from Justine and she asks, "With the cash rate being so low, how are you planning to be able to deliver competitive positive returns on the lower risk investment options?"
And thanks for that question. It probably is one of the more vexing ones in the investment world at the present time, and particularly for people, as I sort of referenced early in the context, the TD's who rely on the income generation from a very stable capital base to provide their ongoing income needs.
The reality of a low risk option, and here we might use the Sunsuper conservative option as an example, is that that kind of option is not only invested in cash or government bonds with exceedingly low returns on a forward looking basis. Those options still include a small allocation to shares and, in addition, some reasonably meaningful allocations to some of the other alternative assets, all of which, as I said, have return prospects that are probably meant to - sorry, mid single digits or slightly higher single digit returns.
Now, the reality is that that still probably means on a prospective basis a return somewhere in the order of 4 to 5%, to take that very risky stab at a forward view, bear in mind though that we have struggled to generate inflation in any developed market in the world that has exceeded, sort of, the 1 to 1.5% level, and in some developed markets it's even lower. So even at a 4, 4.5% level, one is still seeing a healthy return from a low risk option, above the prevailing level of inflation.
Now, the next question that might follow from that, and I'm going to pre-empt it is, but what happens if inflation ticks up again? The reality is that shares and alternative assets, like unlisted property and unlisted infrastructure, have some inflation resilience or some inflation sensitivity built into them. In different ways they will respond to inflation but they do. And that's, again, a comfort in why we have that diversified allocation for the low risk options, so that even if inflation does tick up, and most prognosticators are not foreseeing that in the very near term, but even if inflation does tick up there is some inbuilt resilience within those options, so I wouldn't fret too much, but the point to take away is in a low inflation environment, low returns relative to what we've been used to perhaps five or 10 years ago isn't necessarily a bad thing. It's discomforting but it's not necessarily a bad thing for your retirement savings. Thanks, Georgie.
Okay. Liz, if you would come back to the microphone again, in Sydney. I've got a question here from Morris and Morris asks, "Has Sunsuper revalued unlisted assets correctly?"
Thanks, Georgie, and I've got Ian here with me in Sydney, in case I don't answer the question fully because there's two parts to the question. First of all, management, the investment team under Ian, ensure that valuations are appropriate and fair on an ongoing basis, not just at the end of the financial year, and Ian and his team have a valuation committee where they challenge the valuations of particular unlisted assets to ensure that they are valued appropriately.
From a Board perspective, from the committee that I chair, our job is to ensure that the valuation process is appropriate and that the valuations and the financial statements are correct. So what we do is a deep dive on a number of assets to check that the valuation processes have been carried out appropriately and we get management to justify the basis on which they have valued particular assets so that we can check that the amounts in the financial statements are correct. And then, finally, the financial statements are audited by our external auditor, Deloitte, who are here tonight and I'm sure are also happy to take questions. Ian, did I answer that appropriately?
Perfectly fine.
Excellent. Thank you.
I just want to let you know it's coming up now just after 10 to eight. We do promise to get you out on time and I would remind you that if we don't get to your question, we will post the Q&A's online in the coming weeks. We do have the next question for Ian and it is a very timely question, Ian. Susan asks, "What is the impact of the US presidential outcome on the global economy?"
And if only I knew. No. To be less - less flippant with the answer, as I said in my prepared remarks, I don't think the long-term - even the medium-term economic trajectory or impact on markets will be meaningfully influenced by the outcome of this election. It is quite plausible, particularly given, as we went into the studio this evening, it looked like it was going to be a protracted declaration of the outcome into at least tomorrow our time, that short-term volatility could pick up, but that is markets adjusting in that fear, greed. It's either extremely certain or it's extremely uncertain, kind of way, it's markets reacting to that.
Fundamentally what will determine future growth, what will determine future company earnings, what will determine the capacity of economies to innovate, much of that is unimpacted by the presidency or, in fact, any other movements in the US government or any other national government around the globe. Thank you.
Okay. Thanks for that, Ian, and knowing that we are coming up to the close so, again, we should get you out on time, which would be 7 p.m. in QLD and 8 p.m. for the rest of the Eastern Seaboard. Thank you to our panellists and thank you to all of you again for being part of Sunsuper's 2019-2020 annual member meeting. Look, there were quite a few questions we didn't get to, so please do expect to see those answers online in the next few weeks and we'll also post the video of tonight's forum on our website, because I know there was a fair bit of information in there.
If you've still got questions on your personal Sunsuper account, our team will be staying online to help you. So just remember click that "i" icon and choose "Member Inquiries" or request a callback. Thank you again very much for joining us tonight. It has been our very great pleasure to serve you this year and we all look forward to continuing the work on your behalf through this next year. I think we're all hoping for a less turbulent one. Best wishes to you all and good night.
Read the meeting minutes from November 2020
You can download the 2019/20 Annual Member Meeting minutes.
2019-20 Annual Member Meeting Q&As
Answers to member questions not addressed at the Annual Member Meeting in November 2020 can be found below.
If the merger goes ahead and the fund starts to be run how QSuper normally run their fund can members of Sunsuper leave?
The due diligence phase for the merger exploration with QSuper continues, with a merger only taking place if it is in the best interest of our members. Members are able to switch funds at any time and a switch out of Sunsuper or the merged fund will not incur an exit fee.
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Watch the FY 2019-20 Annual Member Meeting recording
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2018-19 Annual Member Meeting (February 2020)
- Download the 2018-19 Annual Member Meeting minutes, including member questions answered at the February 2020 meeting
- Watch the 2018-19 Annual Member Meeting recording
- Unfortunately, we didn’t have time at the meeting to answer all the questions members submitted. You can now read these questions and answers.
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