LGIAsuper is robust in volatile markets

Market update EOFY 2015 16

LGIAsuper’s investment performance remains robust, with the MySuper Lifecycle (under 75) and Diversified Growth options returning 3.26% and the Balanced option returning 4.12% this financial year.

Despite market volatility primarily caused by economic and geopolitical risks in the Eurozone, Chinese economy instability, falling global commodity prices, and concerns over Japanese deflation, diversification and the performance in our infrastructure and property sectors led to positive results for our members.

Here is a summary of our performance across our key asset classes for the 2015/16 financial year. You can also read our full market update.

International shares

The performance of global sharemarkets has been mixed, with high volatility and somewhat lower returns than the previous year. LGIAsuper’s International Shares sector finished the financial year down 0.7% before tax and fees.

Australian shares

Chinese market volatility, a plunge in iron ore price and all-time lows in crude oil caused the ASX200 to reach its lowest point for the year in February (-13.8%). Despite these losses, LGIAsuper’s Australian Shares sector finished the financial year with gains of 1.7% before tax and fees.

Property

LGIAsuper’s diversified property portfolio provided strong results, with our global listed shares returning 16.9%. Overall, the property sector finished the year with impressive gains of 14.5% before tax and fees, far exceeding its benchmark.

Alternatives

Our investments in alternatives (hedge funds and emerging markets/high-yield debt) returned 1.6% for 2015/16 before tax and fees. The diversification attributes of the alternatives sector were evident throughout such a volatile year for sharemarkets.

Infrastructure

Our infrastructure assets returned a substantial 15.3% before tax and fees. Throughout the year LGIAsuper continued to invest in infrastructure assets, particularly the renewable energy sector as well as a gas pipeline in Queensland.

Fixed interest and cash

Australian fixed interest continues to attract overseas investors. Of the developed economies, Australia has one of the highest official cash rates at 1.75%, however, the Reserve Bank of Australia is expected to take a more accommodative approach to monetary policy in the next 12 months. The fixed interest sector returned 5.7% for the year before tax and fees.

Diversification is key

When markets are as volatile as they have been over the past financial year it’s important to ensure your investments are diversified across different markets and sectors.

We continue to review all our portfolio holdings to ensure our exposures are the right ones for the long term. Our investment strategy has been positioned to minimise the effects of volatile markets to help you grow your super.

Read our full market update for more information on the key economic events which occurred during the 2015/16 financial year could impact your super.

First published:

Jul
20

Last updated:

Dec
05

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