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18 December 2017 

Last week in the markets

Over the past week Australian shares were up 0.1% with small company shares up 0.6%. Shares in developed countries rose 0.6% with the US market up 0.9%. Shares in emerging markets were up 0.7%. The Australian dollar rose 1.8% to 76.46 US cents. The Australian 10 year bond yield fell slightly to 2.52% along with the US 10 year bond yield, which fell to 2.35%. The oil price lost 0.1% to 57.30 US dollars per barrel.

Signing off on 2017

The year-end always provides a good chance to reflect. I have several reflections on 2017:

  • Share markets performed strongly in 2017. Our investment options participated, to different degrees depending on the option’s risk profile, in these market returns and performed well.
  • However, we expect longer-term returns to be lower. Strong short-term performance can sometimes be viewed as pinching from future long-term performance. To a degree we believe this is happening now. This year we reduced the long-term investment objectives for all our diversified investment options. You should consider whether, in a lower long-term return environment, your super strategy is on track.
  • Our Investment team really “put in a shift” this year, undertaking a number of major projects. These were complex so it’s difficult to describe all the outcomes. However, I’m confident that we’re well positioned to be able to construct portfolios which can navigate the uncertain investment environment ahead. 
  • From a retirement-perspective, super is so much more than just an investment balance. Retirement is about the lifestyle that your savings will be able to fund and the security of this lifestyle. We continue to invest heavily in the design of retirement solutions and we’re now recognised as an industry leader. We’ve been involved in projects which have won industry awards. I’m confident that we’ll develop excellent solutions to meet the retirement outcome challenges that our members will face.

Best wishes for the festive season. We’ll be back again with our next update in mid-January.

Signing off

David Bell | Chief Investment Officer

Past performance isn't necessarily an indicator of future performance.

Data sourced from Bloomberg.