Quarterly market update: Jan 2021 to Mar 2021

On the road to recovery 

We’ve continued to see share markets across the world rise, following the trend of the last quarter of 2020.  The increase in COVID-19 vaccinations and the promise of massive government spending, particularly in the USA, were positive for investment markets.

Key points
Our MySuper Balanced option returned 3.30% and our Balanced option for pensions returned 3.65% in the third quarter of FY 2020/2021.
Investment markets have reacted to an incredibly strong recovery in economic activity.
All signs point to 2021 as the year for economic recovery.  This is reliant on one principal assumption:  the successful roll-out of COVID-19 vaccines across the world.  

How the markets performed

It was another strong rally over the third quarter for Australian, Developed and Emerging Markets shares. Investor optimism was fuelled by a few different factors. Mass vaccinations commenced across many countries (with a further opening of economies). There are also huge plans to increase government spending in the USA. And there's an impression that 'COVID normal' business conditions are on the horizon.

Markets have been reacting to a ‘break-out’ very strong recovery in economic activity in 2021. This is great to see after the constrained economic activity of 2020 before COVID 19 vaccines became available. The Australian share market neared record highs. Bond markets were hesitant with the prospect of higher economic growth (and possibly higher inflation) spooking investors, but this settled later in the quarter.  

Australian markets were strengthened by more evidence of an improving economy. The Reserve Bank of Australia signalled that cash rates would stay at current levels until at least 2024.  

What this means for your LUCRF Super account

We'll continue to optimise the configuration of our investment portfolio. Our aim is to ensure it’s strong under current and projected market conditions. 

For the MySuper Balanced (default) option (that most of our members are invested in) and the Balanced option (for Pension members), we retained full exposure to share markets in late 2020. This meant that we were well positioned to participate in the stronger share markets during this quarter. This is clear in our performance results.

We also observed a visible improvement in business conditions in Australia and across major economies around the world. This brighter economic environment led to a reduction in our exposure to Cash over the quarter.

As always, we remain vigilant for strong investment opportunities that will perform well and complement existing investments. We strive to maximise our members’ account balances while not taking excessive risks.

Looking ahead

While more COVID-19 related setbacks are not out of the question, the unprecedented stimulation of economies over the last year suggests that 2021 will be the year for economic recovery.  All this is reliant on one principal assumption:  the successful roll-out of COVID-19 vaccines across the world.  

Investment fundamentals are better than this time last year. But this is driven by massive government and central bank support for households and business. Inevitably this support will reduce at some point and this influences our thinking about the positioning of our investment portfolio for the years ahead.    

Latest returns

This table shows how your investment option has performed for the quarter and 2020/21 financial year so far.

Super/TTR

Investment options3rd Quarter (1 Jan - 31 MAR 2021)FYTD (1 Jul 2020 - 31 mar 2021)
MySuper Balanced
3.30%12.34%
High Growth
4.40%15.70%
Indexed Balanced 12.72%N/A
Moderate
2.36%9.07%
Conservative
1.71%6.64%
Australian Shares (Active)
5.67%19.02%
International Shares (Active)
5.38%20.38%
Australian Shares (Indexed) 14.44%N/A
International Shares (Indexed) 15.87%N/A
Property
-0.59%18.43%
Cash
0.19%0.61%

Pension

Investment Options3RD QUARTER (1 JAN - 31 MAR 2021)
FYTD (1 JUL 2020 - 31 MAR 2021)
Balanced
3.65%13.90%
High Growth
4.90%17.74%
Indexed Balanced 22.90%N/A
Moderate
2.68%10.40%
Conservative 1.94%7.58%
Australian Shares (Active)
6.27%21.18%
International Shares (Active)
5.81%22.56%
Australian Shares (Indexed) 24.81%N/A
International Shares (Indexed) 26.24%N/A
Property
-0.61%20.65%
Cash0.22%0.72%

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

Indexed Balanced, Australian Shares (indexed) and International Shares (indexed) commenced on 8/10/20. Therefore, the Financial Year to Date % for these investments show returns from 8/10/20 to the current date and not from 1/07/20. To see their returns visit our performance page here.

Australian Shares (indexed) and International Shares (indexed) commenced on 8/10/20. Indexed Balanced commenced on 4/11/20. Therefore, the Financial Year to Date % for these investments show returns from the commencement date to the current date and not from 1/07/20. To see their returns visit our performance page here.

Do you have a question about investment performance?

Speak to one of our experienced financial advisers at no extra cost.

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