WA Super News
Reliable performance in uncertain times
At WA Super, we ended the 2018 calendar year with positive returns despite poor performance of the local and overseas stock markets in the last quarter. Our diversified portfolios, had considerably better performance than most other super funds, as we invest across a range of different investment assets, and have less reliance on equities than most of our competitors¹. Looking back over 5 years, we can see that this strategy has a consistent pay off relative to the median super fund performance¹, as shown in the table below that compares rates of return:
Table 1. Net Investment returns for WA Super diversified options versus peer funds¹
So how are we doing?
Over the three years to 31 December 2018, all four of our Super Solutions’ diversified investment options have exceeded their CPI-linked return targets.
Table 2. Net Investment returns to 31 December 2018 by diversified option
MyWASuper has been a positive performer delivering returns of 1.35% in the last 12 months in a tough market owing to its balanced allocation between growth and defensive assets.
The Diversified High Growth option returned 0.76% in the last 12 months, mainly due to their higher exposure to equities and other growth assets throughout a tough year. In comparison, the ASX300 finished the year down over 3% so this diversity of exposures has paid off.
Our Diversified Conservative option posted returns of 1.78%, leading our other diversified portfolios over the last year. The higher allocation to defensive assets in this option protected it from being more heavily impacted by large falls in share prices.
The Sustainable Future option had 1 year performance of -2.21%, driven mainly by a tough environment for emerging markets, but has delivered attractive returns over longer time periods. This option invests in companies that specifically address major social and environmental challenges, and the long term returns prove that it’s possible to focus on the world’s biggest problems and still experience healthy investment growth.
Our asset class options mostly had positive returns for the year, demonstrating that equities aren’t the only way to grow your savings and it can be a good strategy to hold a diversified range of assets.
Table 3. Net investment returns to 31 December 2018 by our single asset class investment options
*Annualised percentage return
How have we compared?
If you compare us to other funds with similar investment options, you’ll see that WA Super is able to deliver above average returns, and, even when our returns aren’t the highest (which can happen!) we’re still competitive against other funds.
Our investment performance this year highlights that we’ve managed risk confidently while equity markets have sold off. It’s important to note that WA Super’s focus on diversification means we’re a safe pair of hands when volatility does strike.
Solid returns across market conditions
The following charts compare the average monthly returns over the last 12 months between WA Super’s diversified options against the median returns of other funds’ comparable investment options as reported by SuperRatings¹. The graphs below compare WA Super’s three diversified portfolios in the ‘up’ months and in ‘down’ months².
Our returns are still as competitive as the most well-known super funds in our peer group, but, when markets don’t perform so well, you can see for yourself how our average returns stack up.
Graph 1 Comparison of average monthly returns during the “Up” and “Down” months for WA Super’s Diversified Conservative versus peer super funds²
Note: WA Super’s allocation to growth assets in this option is 36%. The SuperRatings’ survey Capital Stable Median allocation is between 20% and 40%. Growth assets include shares and property.
Graph 2 Comparison of average monthly returns during the “Up” and “Down” months for WA Super’s Conservative Balance versus peer super funds²
Note: WA Super’s allocation to growth assets in this option is 57%. The SuperRatings’ survey Conservative Balanced Median allocation is between 41% and 59%. Growth assets include shares and property.
When the ASX 300 recorded positive returns during months throughout 2018, WA Super’s returns on average outperformed the relevant returns generated by peer funds.
When the ASX 300 reported negative returns in the months over the last year, our monthly returns on average also outperformed our peer’s average rate of return.
The High Growth fund’s average monthly return over the months where the ASX 300 was negative was -0.60%, while the media fund was down 0.88% in similar circumstances, and the average negative ASX300 return over the year was -2.31%! These may seem like small differences, but they have a big impact over the long term.
Graph 3. Comparison of average monthly returns during the “Up” and “Down” months for WA Super’s Diversified High growth versus peer super funds²
Note: WA Super’s allocation to growth assets in this option is 82%. The SuperRatings’ survey Growth Median allocation is between 77% and 90%. Growth assets include shares and property.
1. Based on SuperRatings Fund Crediting Rate Survey, 31 Dec 2018
2. “Up” months are determined where the ASX 300 had a positive return for the month, whereas “Down” months are defined as the ASX 300 having a negative return for the month during the 2018 calendar year
3 reasons to invest in WA Super
1. We take only the right amount of risk to deliver solid returns
We’ve designed our portfolios to be fit for purpose for the financial profile of our membership. If our goal was to always outperform our peers, then we’d have to take an unreasonable level of risk when investing members’ money.
Ensuring that only the right amount of risk is taken to return the maximum possible investment, means we focus on reducing the chance of members experiencing sustained losses or negative returns.
No two funds have exactly the same financial profile so it is important to keep this in mind when comparing funds.
2. Being open to ideas provides more dynamic investment opportunities
We take every opportunity to test that our strategy is delivering the best outcomes for our members. As a smaller investor, this flexibility allows us to be more active and nimble, and we take advantage of opportunities or manage risks when they arise.
Larger investors can face challenges to implement their decisions because trade sizes need to be large and therefore can impact markets.
3. Our diverse investment mix delivers a smoother ride for members
WA Super’s portfolios are more diverse and less reliant on shares to generate returns than other funds with similar risk profiles.
We ensure our portfolios have a suitable level of exposure to shares, but we actively invest in other opportunities that behave differently to shares; especially when markets move.
Our focus on diversification means we’re a safe pair of hands when volatility does strike. It allows us to deliver a smoother ride for members, and ensure there are less bumps in the road on their journey towards retirement.