Active Super

Active Super products produced positive returns in the year to 30 June 2024, with High Growth options for the Accumulation Scheme, Account Based Pension and Retirement Scheme delivering 10.89 percent, 11.89 percent and 10.88 percent respectively.* This was despite inflation staying higher than desired, and interest rates also remaining elevated.  

The share markets produced good results, partly due to the local and global economies holding up better than expected. However, with lending rates now much higher, the economy has slowed down this year.    

The value of our direct property portfolio is still falling, due to weak demand for office building space and rising vacancy, as some workers continue to work from home. 

Inflation appears to have peaked in Australia and overseas. However, services inflation is proving to be stubborn, and remains higher than the authorities would like. Annual CPI inflation for May 2024 was 4.0 percent. While this is well down from the peak of 8.4 percent in December 2022, it is still higher than expected. Items like rent, electricity, healthcare and insurance are proving hard to bring down. We are hopeful that the Reserve Bank of Australia will patiently wait for inflation to fall back to the 2 to 3 percent comfort zone, but further rate hikes cannot be ruled out. 

The global economy has been weak, with Europe and the UK experiencing mild recessions. Japan has also been flirting with recession, and the US was down to only 1.4 percent annualised GDP growth in the March quarter.  Australia’s annual real GDP growth at March was only 1.1 percent, which is slower than the population growth.  

Inflation is now low in some countries, like China and the UK, and some central banks such as the European Central Bank (ECB) and Bank of Canada have begun to cut interest rates. It is generally thought that the US Federal Reserve will be able to begin trimming interest rates by the end of this calendar year. Here in Australia, we may have to wait longer, with the Cash rate sitting at 4.35 percent since November last year. 

The 10-year bond yield has risen to over 4.3 percent at the end of June, up slightly from where it began at the start of the financial year. This is the reason why bond returns were again low for the year and the higher bond yield hurts the valuation of all financial assets. This is another reason why direct property values have been weak. 

The Australian dollar finished at about the same level it started the financial year, at $0.66 to the USD. Commodities prices for gold and base metals such as copper have been strong over the year. However, the very important iron ore price has slipped and the lithium price has crashed due to new supply and softer demand for electric vehicles. 

The best stocks for the year in the Australian share market were led by electronics design company, Altium Limited, who is being taken over by the Japanese company, Renesas Electronics. The best stocks also included Real Estate companies like Goodman Group and Unibail-Rodamco-Westfield.  

Take a look at the latest Active Super performance results.

 *Past performance is not a reliable indicator of future performance. Investment returns are shown as a percentage, after the deduction of tax and investment fees. Retirement Scheme returns are for the Contributor Financed Benefit.