For the financial year ended 30 June 2017
With the election of Donald Trump as US President in November 2016, share markets produced some interesting and volatile results over the financial year, and it was certainly a period that required active investment management.
The financial year was one of two distinct halves:
- In the first six months – two things drove Australian and US share markets: growth in commodity markets and the initial enthusiasm around the election of the Trump Administration, with talk of increased infrastructure spending, economic stimulus, and improved consumer confidence.
- In the second six months – as the reality of the new Administration became apparent, US and Australian markets were much softer. During this time, more promising investment signs emerged from European, Japanese and emerging markets.
Unlisted property and infrastructure continued to perform well.
With listed property (AREITs), historically high asset values came under pressure as investors focused on the likely effect of higher interest rates in the future on these assets. Listed property (as measured by the S&P ASX 200 Index) declined by over 6% during the financial year.
Our decision to progressively reduce our exposure in Australian listed property from around 6% to under 1% by the end of the financial year helped cushion the portfolio from this correction in valuation.
Strong returns for members
Very pleasingly, REI Super’s Balanced option delivered a net investment return of 8.46% for the financial year to 30 June 2017, well in excess of its performance objective of inflation (CPI) plus 3%.
When measured over five years, the Balanced option has provided an average net investment return of 10.02% per annum.
This is a great result for REI Super members and testament to the benefits of our disciplined strategy of investing in assets that are well-priced and that have a high level of potential to provide excellent long-term returns for members, with an acceptable level of risk.
Go to the investment performance section of our website to see investment returns of all of REI Super’s investment options.
Note: Past returns are no guarantee of future performance, and investment returns of less than one year should not be relied upon as any guide to future performance.