Investment Update 2020/21
September 1st, 2021
STRONG RETURNS FOR MEMBERS
It’s been a big year for First Super members, with positive returns across the board.
The default Balanced option, where most super members are invested, returned an impressive 14.73% to 30 June 2021. That puts us in the top 25% of funds, as measured by SuperRatings, when compared to similar options.*
For members in the pension Balanced option, the return was 16.22% over the same period.**
In fact, three of First Super’s investment options produced double-digit returns, with Growth and Shares Plus building on a strong rebound in share markets.
Watch First Super CEO Bill Watson’s investment video
Investment returns for 2020/21
| Super (accumulation fund) |
Investment returns from 1 July 2020 to 30 June 2021 |
|---|---|
| Balanced (default) | 14.73% |
| Shares Plus | 22.16% |
| Growth | 18.47% |
| Conservative Balanced | 9.78% |
| Cash | 0.44% |
Did you know? During the last financial year, the investment return for a member with $100,000 saved in the Balanced option, earning $50,000 in salary in a year, was more than three years’ worth of employer superannuation contributions.#
What were the key drivers of performance?
Global and local share markets were the main drivers of performance. This is why investment options that are more heavily invested in equities produced higher returns for members.
A good example is the Growth investment option, which returned 18.47%. Compared to the Balanced option, it holds more shares and similar growth assets, which performed strongly over the last 12 months.
It’s useful for members to know that First Super’s Growth option is actually best compared to other funds’ Balanced (default) options. This is because our Balanced option generally takes on less risk than those funds, while our Growth option has a more like-for-like set-up.
As a First Super member, you can choose from five investment options, which have varying levels of risk, depending on what assets they are invested in, and in what proportions.
For instance, members who have chosen either the super or pension Conservative Balanced option would typically be seeking less risk, as this investment choice has lower exposure to shares and growth assets. They can be very pleased with the financial year’s return of around 10%, which performed above the median of other funds, as measured by SuperRatings.^
Looking ahead
It’s important to remember these are one-year numbers only and members shouldn’t expect these kinds of returns every year. Consistently strong performance over the long term, in different market conditions, is what matters most for growing healthy super balances.
Over the past five and 10 years to 30 June 2021, First Super’s Balanced option has returned 8.39% p.a. – a strong, steady performance for members over the longer term.
Looking ahead, it’s expected the share market recovery will continue in the second half of 2021, with economic growth being fuelled by ongoing COVID-19 vaccine rollouts and the rollback of restrictions in some countries.
At First Super, we will continue to approach investing with an active mindset, selecting investments with the aim of delivering consistently good returns while protecting members from risk.
Find out more
- View First Super’s super and pension investment returns and crediting rates for 2021 and previous years.
- Watch our FIRSTtalk video Understanding Your Investment Choice.
- Read our Investing Your Super PDS.
Past investment returns are not a reliable indicator of future returns. Based on the 2020/21 financial year crediting rate, which is the return minus investment costs and taxes.
*SuperRatings SR25 Conservative Balanced (41-59) Index, June 2021.
**There is no tax paid on investment earnings in Allocated Pension Accounts, so returns will generally be a little higher than for super members.
^SuperRatings SR50 Capital Stable (20-40) Index, June 2021.
#Based on a super guarantee (SG) rate of 9.5% for a member with $100,000 invested in the Balanced option on 1 July 2020. Investment returns on SG contributions for the 2020/21 financial year have not been included in this calculation. Assumes a member on a salary of $50,000 would be eligible for $4,750 SGC (minus 15% contributions tax). Results rounded to nearest whole number.