Quarterly Market Snapshot: 3rd Quarter (Jan to Mar 2019)

Turning a fresh page 

Shrugging off the concerns from 2018, investment markets turned a corner. We saw a near complete reversal in sentiment this quarter.

Key points
  • Our MySuper Balanced option returned 5.69% and our Balanced option for pensions returned 6.49% for the first quarter of 2019.
  • High growth assets, like shares and listed property, have generated roughly a whole year’s return in a single quarter, but global growth has not rebounded.
  • While markets have shrugged off concerns from 2018, diversification remains important, so don’t switch options based on past returns alone – talk to us first on 1300 130 780.

 

How the markets performed

Investment markets have rallied hard over the first three months of the year with renewed optimism, after a horrible end to 2018. Investors expect a positive resolution to trade tensions between the US and China soon (despite numerous delays). Thankfully,   the US Federal Reserve Bank has ‘paused’ its cycle of interest rate increases. China has been stepping on the accelerator, deploying a lot of stimulus to its domestic economy over the 3rd quarter.

While global macroeconomic indicators (such as industrial production) have weakened, investment markets likely overestimated the impact this would have on consumers and companies. This is why media reports remain pessimistic whilst investment markets continue to rally and member balances continue to increase.


What this means for your LUCRF Super account

During the quarter, we continued to look for good investment opportunities whilst remaining aware of the risks we're taking.

For our MySuper Balanced option* (our default option that most members are invested in), we increased exposure to shares in emerging markets (held within international shares). They appeared inexpensive and had factored in a lot of bad news. We've also increased our exposure to cash as investment markets rallied during the quarter. 

We hope these changes will result in higher member balances over time.

Looking ahead

We expected listed shares to ‘whipsaw’which they have done by flipping to the ‘upside’. However, it's unlikely to be one-way traffic for the rest of the year, especially after some high growth/high risk assets, like international shares and listed property, have already generated more than a normal year’s worht of gains in three months.

Last quarter we spoke about the year being a tale of two halves. Since then, a number of events scheduled to occur in the first half have been either dealt with or delayed. While this has increased certainty in the near term, it's also increased uncertainty in the long term.

Latest returns

This table shows how your investment has performed for the quarter and financial year to date (FYTD). To discuss market conditions or your own financial situation, please call one of our financial advisers on 1300 130 780.

Super/TTR rates

Investment options3rd Quarter (1 Jan – 31 Mar 2019)FYTD (1 Jul 2018 – 31 Mar 2019)
MySuper Balanced5.69%2.73%
High Growth6.96%3.32%

Targeted Return

2.47%4.20%
Moderate4.46%3.34%
Conservative3.43%2.49%
Australian Shares8.49%1.25%
International Shares10.91%6.10%
Indexed Shares10.47%5.35%
Property12.94%13.00%
Cash0.49%1.49%

 

Pension rates

Investment options3rd Quarter (1 Jan – 31 Mar 2019)FYTD (1 Jul 2018 – 31 Mar 2019)
Balanced6.42%3.19%
High Growth7.86%3.80%
Targeted Return2.85%4.47%
Moderate5.07%3.87%
Conservative3.90%2.96%
Australian Shares9.46%1.74%
International Shares12.15%6.62%
Indexed Shares11.34%5.89%
Property14.30%14.48%
Cash0.58%1.76%
*This is called the Balanced option for pension members.
Issued May 2019 by L.U.C.R.F Pty Ltd ABN 18 005 502 090 AFSL 258481 as Trustee for Labour Union Co-Operative Retirement Fund (LUCRF Super) ABN 26 382 680 883. It is general information only and has been prepared without taking into account your personal financial situation, objectives or needs. General information is not advice. You should assess your personal financial situation before making a decision about LUCRF Super. To help you decide we recommend you read our current Product Disclosure Statement (PDS), available at lucrf.com.au or by calling 1300 130 780.