Q: 2020 was a year that no one will forget quickly. What investment strategies did Sunsuper enlist during COVID-19?
A: “We were able to take advantage of opportunities in share markets and credit markets that emerged as a result of the crisis. Our purchases of Australian and international shares and non-government securities, during the worst of COVID-19, have generated meaningful gains for members. However, we also faced a significant increase in demands for liquidity from our members; initially from members moving into cash at the height of the crisis and then from the Government’s Early Release of Superannuation program. And all the while, we’ve been able to maintain a strong underlying liquidity position in the fund.
“We also increased our exposure to foreign currencies. This step does not necessarily reflect an expectation of a decline in the Australian dollar. Given the long-standing tendency of the Australian dollar to fall sharply during times of market stress, a higher allocation to foreign currency is a way to provide additional protection to our diversified portfolios in the event of a further major share market correction.”
Q: What do you think is likely to happen in 2021?
A: “We have no way of knowing with any certainty how the COVID-19 outbreak will evolve from here, or how the economy and financial markets will evolve over the course of this year and we don’t invest money based on our own, or anyone else’s short-term economic or market forecasts. Vaccines have started to be rolled-out and that’s great news for the global and Australian economies. However that roll-out is going to take time, there’s still going to be setbacks along the way and there’s likely to be a wide variation in the strength of recovery across countries and industries. And even with vaccines being rolled out, economic recovery is going to need the ongoing support of macro policymakers (particularly governments). More recently, a new US administration coming to power and a Democrat majority in Congress means the US economy is going to get more support from fiscal policy.
“We remain of the view that shares offer very attractive value relative to bonds and cash where future returns are likely to be very low. Within our shares’ exposure, both Sunsuper and our international share managers continue to favour European over US shares on relative valuation grounds. Sunsuper continues to hold a significant allocation to alternative asset classes, particularly the key unlisted asset classes of property, infrastructure, private equity and private credit. From here we expect these assets to deliver strong, long-term returns – above those of the traditional asset classes - while reducing our members exposure to share market volatility.”
Q: Brian, how can people find out more about Sunsuper investment options?
A: “There are a number of Sunsuper investment options that give exposure to a diversified range of asset classes, including both public market and unlisted investments. Sunsuper offers members a range of 19 investment options to allow you to tailor your investments to your needs.
“There is plenty of information on the Sunsuper website, or, if you’d like to speak to a real person, give our team a call. We also provide Market Watch updates, podcasts and member seminars, so you’ll never run short of great ways to access the information you need."
Start making a real difference to your retirement today. Contact us on 13 11 84 between 8.00am to 6.30pm (AEST) Monday to Friday or visit sunsuper.com.au/choose.
To view Brian’s latest Market Watch update, go to www.sunsuper.com.au/newsroom/market-watch.--
This article has been prepared and issued by Sunsuper Pty Ltd, (ABN 88 010 720 840, AFSL No. 228975) the trustee and issuer of the Sunsuper Superannuation Fund (ABN 98 503 137 921, USI 98 503 137 921 001). It contains general advice and does not take into account the investment objectives, financial situation or needs of any particular individual. You should consider if the advice is appropriate to your own circumstances before acting on it. Outcomes are not guaranteed. Past performance is not a reliable indication of future performance. Sunsuper employees provide advice as representatives of Sunsuper Financial Services Pty Ltd (ABN 50 087 154 818 AFSL No. 227867) which is wholly owned by the Sunsuper Superannuation Fund. Visit sunsuper.com.au or call 13 11 84 for a copy of the PDS.