What has happened this Financial Year
Inflation, rising interest rates, and geopolitical risk have all contributed to financial asset price declines this financial year. In many cases, bonds, which are traditionally a safe haven, have fallen as much or more than shares. Most listed markets around the world have declined between -10% and -20% during the financial year.
Higher interest rates and lower asset prices should cool the high inflation over the coming year. However, investors remain cautious due to increased risks of recession due to these same factors.
Balancing Short Term and Long-Term Returns
Great care has been taken with your investment to appropriately balance short-term financial market turbulence with long-term returns. This financial year, while bonds declined by more than 10% and shares declined between 6% and 20% across the globe, NESS MySuper Option only declined 3%. This was strong protection due to diversification and active management. NESS MySuper has outperformed the median super fund for the second year in a row. NESS has also undertaken an exercise to reduce fees which will accrue additional returns to members prospectively.
Healthy Long-Term Returns
NESS has been able to exceed stated investment objectives over time for all investment options and is well-positioned to continue.
Financial Year 2023 Outlook
Looking forward to the next financial year, we are expecting some continued volatility through the first half of the financial year (July-December) with increased stability and upside potential in the second half of the year (January-June) as higher interest rates mitigate the inflationary environment and investor demand increases for assets at better valuations. NESS Super is well positioned with liquidity, flexibility, and diversification across asset classes, geography, and sector to navigate the environment safely on behalf of members while being able to take advantages of opportunities as they continue to unfold.
|S&P/ASX 300 Index||-12.22%||-10.39%||-6.78%|
|MSCI World ex Australia Index||-8.42%||-16.13%||-6.52%|
|MSCI World ex Australia Index (Hedged)||-15.10%||-19.37%||-12.51%|
|MSCI Emerging Markets Index||-3.30%||-12.91%||-18.43%|
|S&P/ASX 300 A-REIT Index||-17.49%||-23.03%||-11.22%|
|Bloomberg Australian Composite Bond Index||-3.81%||-9.46%||-10.51%|
Note: Returns are as of 30 June 2022 in AUD
We’re here to help
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Things you should know
The information contained in this article is current at the time of its publication. However, some information may change over time. The content is for general information only and does not constitute personal advice. We recommend that you consult with a suitably qualified person before making any financial decisions. For more information on NESS Super, or before deciding whether to acquire or hold a product, consider if it is appropriate. See our Financial Services Guide (FSG), the relevant Product Disclosure (PDS) and the Target Market Determination (TMD).