Quarterly market update: July 2019 to Sept 2019

Markets ignore economic weakness

Stock market performance this quarter has remained positive, despite global political and economic concerns

Key points
Our MySuper Balanced option returned 1.82% and our Balanced option for Pension, returned 2.04% for the first quarter of FY 2019/2020
Interest rate cuts, and the potential for further rate cuts, has delivered good returns for growth assets to date
Despite the unusual strength of both bond and equity markets, diversification remains an important way to safeguard performance. Don’t switch options based on past returns alone, talk to us first on 1300 130 780.

How the markets performed

Bond and equity markets continue to perform strongly this quarter, although trade tensions remain. The US and China each raised tariffs in August, and after more than a year of tensions, there’s still no resolution. In late September the US imposed tariffs on European imports. The US/China trade war continues to negatively impact both countries and global economic growth. It’s also contributed to less investment into China and prevented Emerging Market equities from outperforming.

Last quarter, central banks indicated they’d cut rates. This has now happened, with the Reserve Bank of Australia making three rate cuts and the US Federal Reserve Bank, two. They’ve indicated that they’re willing to make further cuts to sustain the economic expansion.

What this means for your LUCRF Super account

We test the strength of our investment portfolio under current and projected market conditions to optimise member Super and Pension accounts.

For our MySuper Balanced option (that most of our members are invested in) and Balanced option for Pensioners, we’ve taken steps to increase our exposure to infrastructure. This is done to provide diversification and assist the portfolio in a variety of scenarios that could eventuate from here.

Looking ahead

We remain concerned about poor economic data and why it’s not yet reflected in stock prices. We think the stock market may be boosted by interest rate cuts. Recent speeches from central bankers who pledge to support economies may also be having a positive impact.

US/China trade relations worsened during the quarter. At the time of writing, there’s been a phase one or partial deal between the US and China, which includes a suspension of tariff hikes that had been proposed by the US. However, it’s not a comprehensive agreement and US/China trade tensions are likely to be an ongoing issue

We expect the low interest rate environment to continue which will support growth assets and cushion them from the impact of slowing global growth.

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 free of charge on 1300 130 780.

Super/TTR

Investment options1st Quarter (1 July - 30 Sept 2019)Financial year to date (FYTD)
MySuper Balanced
1.82%
1.82%
High Growth
2.27%
2.27%
Targeted Return
0.89%
0.89%
Moderate
1.73%
1.73%
Conservative
1.30%1.30%
Australian Shares
3.86%3.86%
International Shares
2.15%2.15%
Indexed Shares
3.60%3.60%
Property
0.92%0.92%
Cash
0.39%0.39%

Pension

Investment Options1ST QUARTER (1 JULY - 30 SEPT 2019)
FINANCIAL YEAR TO DATE (FYTD)
MySuper Balanced
2.04%
2.04%
High Growth
2.55%2.55%
Targeted Return
1.03%
1.03%
Moderate
1.98%
1.98%
Conservative 1.49%
1.49%
Australian Shares
4.32%
4.32%
International Shares
2.31%
2.31%
Indexed Shares
3.89%
3.89%
Property
1.03%
1.03%
Cash0.46%
0.46%

Past performance is not a reliable indicator of future investment returns. 

Issued October 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 Financial Services Guide (FSG) and Product Disclosure Statement (PDS), both available at lucrf.com.au or by calling 1300 130 780.

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