December 2022 Quarterly Report

6 March 2023

Key highlights

  • All investment options had positive returns and the Triple S Balanced Default Option returned 4.1%.
  • Australian and international equity markets returned 9.1% and 4.0% respectively.
  • Bonds had a slightly positive return.
  • Economic indicators suggest inflation may have peaked across large parts of the developed world.
  • Market volatility remains as there is an increased possibility of a US-led global recession in 2023.
  • Rising cash rates have increased the expected return of the Cash investment option. 

Triple S returns on 31 December 2022 

Investment option

 3 months

    1 year

    3 years
     % p.a.

  5 years
   % p.a.

 10 years
   % p.a.







Capital Defensive


















Socially Responsible












High Growth






Returns net of fees and gross of tax, based on Super SA unit pricing formula. 

Economic update

In Australia, inflation remains high and the Reserve Bank of Australia (RBA) increased the cash rate to 3.1% to try to bring inflation down. The RBA noted that ‘higher inflation and higher interest rates are putting pressure on household budgets, with the full effects of higher interest rates yet to be felt in mortgage payments’. In other words, it takes time for higher mortgage payments to slow down household spending and have their full effect on reducing inflation.

There are indicators that higher interest rates have started to reduce inflation across large parts of the developed world. If inflation peaks soon, central banks will need less rate rises in 2023. US consumers particularly are expected to be constrained by the higher interest rates.  There is an increased likelihood that the US economy will slow down and enter a recession. Although Australia is better placed, there is a moderate chance that we will experience a recession.

Australian equities

Australian shares (S&P/ASX 300) delivered a 9.1% return over the December quarter, achieving the strongest quarterly return in 2 years. All sectors achieved a positive return, with performance being particularly strong within the Materials (+14.7%) and Financials (+10.8%) sectors. In October, the market expected the RBA to increase the cash rate by 0.50%. It was a positive surprise when the RBA only increased rates by 0.25% and the Australian market rallied strongly. China’s reopening and relaxation of COVID-zero policies were also positive for the Australian share market. This is because Australia is a major commodity exporter to China and this news caused commodity prices to significantly increase.

International equities

Global developed market equities returned 4.0% over the quarter. US and European equities were generally strong. The US Federal Reserve and the European Central Bank aggressively increased cash rates in 2022. The Federal Reserve’s final rate hike of the year was decreased to  0.50% compared to the previous four hikes of 0.75% each. Smaller rate rises were a positive sign that the central banks would slow down the rate rises.

Global emerging market equities performed in line with developed markets, also returning +4.0% (unhedged, AUD). Chinese equities were boosted by the relaxation of China’s COVID-zero policies and government support for the property sector.

Fixed interest

The Fixed Interest asset class had slightly positive returns over the quarter.

The increasing cash rates have been a negative force pulling down bond prices. This is because cash rates and bond prices generally move in the opposite direction. The market expects that cash rates will soon peak and this is seen as? a positive for the bond market. 

Cash investment option and rising cash rates

Investment returns are not guaranteed. This is true for all investment options, including the Cash investment option. This option is invested in short-dated assets like term deposits, bank bills, and floating rate notes. While the target return is the cash rate set by the RBA, the return is dependent on the performance of the underlying ‘cash-like’ assets, and fees and taxes are deducted.

It is important for us to explain how the RBA increasing the cash rate has impacted the assets in the Cash option. Some of the assets that are in the Cash option are locked into an interest rate for a short time. This is like the way term deposits lock an investor into a quoted rate for a short period. If the cash rate increases over that period, the term deposit investor will still receive the locked in lower interest rate.

In April 2022, before the RBA began increasing the cash rate, part of the Cash option was invested in assets that reflected the low cash rate of 0.10%. In May, when the cash rate was increased, some assets matured and were re-invested at a higher rate. However, there were other assets still locked into the lower rate (like being locked into a term deposit). As the RBA continued to increase rates between June and December, more assets matured, and the funds could be invested at a higher interest rate. This explains how it takes a short time for the portfolio’s assets to mature so they can be invested at a higher interest rate. As the cash rate only increased to 3.10% in December, it will take a period of time for old assets to mature. Please note that the target return of the Cash investment option is now 3.10% over one year.

The other important thing to note with cash rates is that the rates specified are annual term rates meaning it takes a full 12 months for the rate to be realised. 

We encourage our members to seek financial advice before making any changes to their superannuation investments.  If you need help locating one, you can contact the Financial Planning Association of Australia.

If you have any questions in relation to this matter, please contact Super SA on (08) 8214 7800 or e-mail via or at Super SA's website which can be accessed at

The information in the article above has been prepared in good faith by Funds SA. However, Funds SA does not warrant the accuracy of the information and to the extent permitted by law, disclaims responsibility for any loss or damage of any nature whatsoever which may be suffered by any person directly or indirectly through relying upon it whether that loss or damage is caused by any fault or negligence of Funds SA or otherwise. The information is not intended to constitute advice and persons should seek professional advice before relying on the information.