Markets finished on a high in 2017
The fourth and final quarter of the 2017 calendar year delivered solid positive returns across key global markets, to round off an exceptionally strong year, especially for growth asset classes such as shares and property.
Widespread healthy economic data continued to be reported, which boosted confidence among investors about the prospect for continued growth in the major world markets, particularly the US, Europe and China.
We also saw positive company earnings and continued low interest rates, all of which contributed to the positive mood and saw share markets record double digit yearly gains across most regions. As a result, markets started 2018 with an overwhelmingly optimistic tone.
Growth in investment markets was quite broad-based, with Australian and International shares, real property, listed property, and global property all showing increases over the calendar year to 31 December 2017.
The US information technology sector, (which includes companies such as Google, Apple and Facebook), did particularly well, returning a somewhat breathtaking 37% in local currency terms for the calendar year.
Strong returns for REI Super members
REI Super’s returns for the quarter were excellent, and we finished the calendar year with the Balanced option having provided a net return of 10% to members’ accounts in the 12 months to 31 December.
Our average return for this option when measured over five years was 9.6% per annum, which has – most pleasingly – produced very healthy growth in our members’ accounts in real terms over that longer period.
We are cautious as always
In 2017 there were high levels of optimism in stock markets, but as we have seen in the share market volatility more recently, we need to be very careful about how that optimism plays out.
As usual we are cautious of over-investing the portfolio in any narrow sector (eg. the American IT sector), particularly when it has risen so steeply in price.
At REI Super we look for broadly based portfolios of reliable, well-priced investments to generate long-term growth in our members’ savings. With that in mind, we are careful not to over-invest in sectors that are hot and volatile.
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.