An overview of investment markets
In the quarter ended 30 June 2016 there was short-term volatility caused by the outcome of the Brexit vote, but nevertheless most markets recovered from losses they sustained in the previous quarter.
This characterised the movement of investment markets throughout the 2015/16 financial year. Disruptions in the Chinese currency, the falling oil price, and the response to the Brexit ‘Leave’ vote caused losses closely followed by gains, resulting in a more or less flat result at the end of the financial year. Although a number of world share markets dropped by as much as 10% at various points during the year, these nevertheless recovered on each occasion.
These swings in the markets sometimes caused significant reaction and speculation among some investors, who found it to be a difficult trading environment. But it was also the type of environment that provided opportunities for those with good investment skills, a robust process and access to deep investment research to generate good investment outcomes.
In addition to world share markets being volatile, we saw significant volatility in world currencies (including the Australian dollar) and in fixed interest markets. Global and Australian property remained strong performers.
Consistent, top-quartile returns for our members
Despite the ongoing volatility, REI Super has continuously delivered top-quartile returns and excellent results for members.
- For the quarter ended 30 June 2016 our Balanced option delivered a net investment return of 3.36%, compared to the median* Balanced fund return of 2.58%.
- For the full financial year our Balanced investment option outperformed most other balanced funds, with a net investment return of 5.35%, compared to the median* return of 2.58%.
- When taken over a seven-year period, our Balanced option has delivered an average net investment return of 9.21% per annum, compared to the median* return of 8.35%.
In fact, we’ve more than doubled our members’ money since the GFC
A great testament to the success of our strategy is the recent finding by ratings agency SuperRatings that REI Super is one of only eight superannuation funds that has achieved an accumulated return of more than 100 per cent on its balanced option since the Global Financial Crisis. In other words, we are one of only 8 funds that have doubled our members’ money since then – and that’s even without the benefit of contributions.
In the period between 1 March 2009 and 31 May 2016 our Balanced option achieved a 100.6 per cent accumulated return, which equates to an annual return during that period of 10.1 per cent.
We’re very proud of this recognition because it demonstrates we are succeeding in our core objective, which is to deliver strong long-term returns that will help you enjoy a comfortable retirement.
How have we done it?
REI Super has achieved and continues to achieve these strong returns by sticking to our disciplined strategy of:
- Investing less when markets are expensive and investing more when they are cheap;
- Diversifying across a range of different types of assets, countries, industries and currencies and by
- Identifying investments that offer good value and a good return for their level of risk
A cornerstone of our philosophy is that members’ investments need to have adequate capital and downside risk protection. This approach has served – and continues to serve - our members very well.
Pre-mixed investment options
Net investment returns for the period ended 30 June 2016
Sector investment options
Net investment returns for the period ended 30 June 2016
1 Option only available from 1/10/2013
2 Options only available from 31/07/2006
* Median returns
REI Super investment options and median fund returns
- Growth - SuperRatings High Growth (91-100) Index
- Balanced - SuperRatings SR50 Balanced (60-76) Index
- Stable - SuperRatings Capital Stable (20-40) Index
- Premium Income - SuperRatings Secure (0-19) Index
- Australian Shares - SuperRatings Fund Crediting Rate Survey – Australian Shares
- International Shares - SuperRatings Fund Crediting Rate Survey – International Shares
- Australian Property - **No SuperRatings benchmark available
- Global Property - **No SuperRatings benchmark available
- Bonds - SuperRatings Fund Crediting Rate Survey – Diversified Fixed Interest
- Cash - SuperRatings Cash Index
Please note:
Future investment performance can vary from past performance, and you should not base your decision to invest in REI Super simply on past performance. Past earning rates are not an indicator of future earning rates. The investment returns of REI Super are not guaranteed, and the value of the investment may rise or fall.