Current financial market volatility
12 October 2018
Members may have noticed that financial markets have experienced some volatility over the past few days. In particular there have been movements in the share market and these movements can make us feel concerned about how this might affect the value of our superannuation savings. The recent falls in global share markets, including the Australian market, are an example of this.
Share markets have fallen over the past few days as a reaction to a number of key themes:
- Continued concerns about US and Chinese trade negotiations
- US interest rates possibly rising faster than anticipated and
- Forecasts by the International Monetary Fund (IMF) of lower global growth.
These themes are not new and members will recall that during February and March 2018 financial markets also experienced heightened volatility as a reaction to these themes.
Super SA’s investment manager, Funds SA, constantly monitors and reviews the appropriateness of the investment strategies and managers. Changes to the strategy are made to achieve the best outcome for members.
Investment options remain well diversified
Notwithstanding this short-term volatility, members’ investment options remain well diversified. It has been our strategic objective to build portfolios that have less exposure to share markets, to help safely navigate through turbulent periods. Although portfolios are not immune to the volatility stemming from share markets, Super SA’s asset mix, including high quality bonds, property, private equity and other unlisted assets, have helped to lessen the gyrations and deliver a smoother return profile for members.
Focus on the longer term
While we remind members that investment returns can be volatile in the short‑term it is better to remain focussed on the long‑term.
The best long run guide to the investment outcomes of the Super SA options is their investment objectives. For example, the Balanced option is targeting a return averaging 3.5 per cent above the inflation rate when measured over long‑term periods (of at least 7 years).
Superannuation remains a long‑term strategy but with a well‑diversified portfolio, investment goals may be achieved with greater certainty.
The information provided is of a general nature only and has been prepared without taking into account any of your individual objectives, financial situation or needs. While Super SA makes every effort to ensure that the information is accurate and up to date, changes in circumstances may affect the accuracy of the information presented.
Before acting or relying on any information, you should consider its appropriateness having regard to your own objectives, financial situation or needs. You should also seek independent financial advice and refer to the relevant Super SA Product Disclosure Statement before making any financial decisions.