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ANZ Smart Choice Super report: December 2020

Published 1 March 2021

Markets rally with a brightening outlook ahead

ANZ Smart Choice Super Lifestage investment options' performance (%)

Investment Option

3 months

1 year

3 years (p.a.)

5 years (p.a.)

1940s

3.06

1.17

 4.32

4.34

1950s

3.94

1.56

 4.77

5.17

1960s

6.33

2.08

 5.61

6.45

1970s

7.79

2.27

 6.17

7.40

1980s

8.48

2.19

 6.40

7.82

1990s

8.65

2.35

6.49

7.94

2000s*

8.47

2.38

6.30


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.  
* The inception of the 2000s fund was on 18 February 2017 so there is no performance data available for five years.

Based on your decade of birth, the table above shows how your investment option has performed in the December 2020 quarter (the ‘3 months’ figure), and over the past one, three and five years.

ANZ Smart Choice Super’s Lifestage investment options all performed positively during the December 2020 quarter on the back of a brightening outlook for the global economy and the start of COVID-19 vaccine rollout, as well as the continuation of large fiscal and monetary support programs.

Over the year to December, the Lifestage funds returned 1.17% to 2.38% as the global economy started to heal following the deep pandemic induced recession. Please read below for an Investment Team update on the factors that helped to drive positive returns in the December quarter.

The Smart Choice funds with more of an allocation to growth assets continued to perform solidly over the long term with the 1980s and 1990s Lifestage options achieving above median performance over five years. ANZ Smart Choice Super Portfolio Manager, Manish Utreja, said “We remain committed to helping our clients achieve a secure retirement by using a strategic, disciplined approach.”

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1940s

 3.06

1.17

 4.32

4.34


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.  

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1950s

3.94

1.56

 4.77

5.17


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.  

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1960s

6.33

2.08

 5.61

6.45


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.  

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1970s

7.79

2.27

6.17

7.40


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.  

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1980s

8.48

2.19

6.40

7.82


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.  

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1990s

 8.65

2.35

6.49

7.94


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.  

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

2000s*

 8.47

2.38

6.30

_


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.  
* The inception of the 2000s fund was on 18 February 2017 so there is no performance data available for five years.

Diversification is important

Diversification is fundamental to ANZ Smart Choice Super’s dynamic Lifestage investment philosophy, which is used to build a portfolio across assets including Australian and international shares, cash, property and fixed interest securities, based on your age and time to retirement.

Returns across Lifestages explained

Younger members (for example those born in the 1990s or 2000s) are more heavily invested in growth assets such as shares. This means these members saw their super balance most negatively impacted during the pandemic driven recession. That said, they have now seen strong performance as share markets continued to rally through to the end of 2020 despite the recession.

Older members (for example those born in the 1940s, 1950s and 1960s) saw less impact to their super balances in 2020 as they have more limited exposure to growth assets and more exposure to defensive assets like fixed interest and cash.

Our ANZ Smart Choice Super – smart investments tool is easy to use and explains how you are invested over time.

ANZ Smart Choice Super choose your own investment mix performance (%)

 

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

Australian fixed interest^

-0.12

3.50

4.14

Australian shares

12.02

1.71

6.74

8.49

Global fixed interest

0.80

4.21

3.75

3.60

Global property

9.26

-12.51

0.45

2.65

Global smaller companies

13.40

4.43

7.47

9.16

International shares (hedged)

10.46

8.80

7.77

10.00

International shares (unhedged)

5.05

4.95

9.99

9.77

Cash

0.10

0.47

0.99

1.21

Conservative

2.29

1.44

3.83

3.88

Moderate

4.04

1.47

4.75

5.31

Growth

6.39

2.08

5.62

6.74



Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. All returns are after the deduction of investment fees. Reporting data is to 31 December 2020 (p.a. = per annum). Past performance is not a reliable indicator of future performance.

^ The ‘Australian fixed interest’ fund’s inception was on 18 February 2017 and therefore the five-year performance data is not available.
 The ‘Global smaller companies’ investment option is not available to members of ANZ Smart Choice Super and Pension.

All but the Australian fixed interest option achieved  positive returns over the December quarter in the ‘Choose Your Own’ investment options. Global smaller companies achieved a strong 13.40% return and Australian shares lifted in the quarter, returning 12.02%. Global property rebounded to 9.26% for the quarter, although this option was still down (-12.51%) for the year as a whole, reflecting the negative impact of pandemic lockdown measures on the property sector.

Defensive assets were more challenged in the quarter with the impact of very low interest rates and bond yields displayed in the returns for Australian and global fixed interest, and cash returning -0.12%, 0.80% and 0.10% respectively.

You can access your ANZ Smart Choice Super returns across the full suite of investment choices online or by visiting the ‘Investment portfolio’ page via your ANZ Smart Choice Super account in ANZ Internet Banking

Market and economic snapshot

As we closed out 2020 it was clear that the COVID-19 health crisis was far from over. In fact, the virus escalated, most notably in countries such as the UK where a new and potentially more infectious strain of the virus was identified (B117), forcing tighter lockdown measures to be re-established.

The US situation also grew more severe with the number of infections and deaths intensifying in December after falling in mid-November. In Australia, the path to normalisation was disrupted when a new cluster emerged in Sydney’s Northern Beaches and a case of the new B117 strain was picked up in Brisbane, forcing border shutdowns to be reinstated.

Tragically the COVID-19 pandemic has now taken over two million lives and the measures to try and contain the virus triggered the deepest global recession since World War II. Despite this, at the end of 2020, a more positive outlook for the global economy seemed to lift investor sentiment and global share market returns were boosted as a result.

What’s driving the positive outlook?

Stimulus measures

One key reason that the markets recovered strongly is because of the large, swift and well-coordinated, fiscal and monetary policy support. The unprecedented scale of assistance lifted returns well above the levels we would normally associate with a deep recession.

Going ahead, we think that global policy makers will continue to pump in support to drive stronger economic growth and jobs and keep inflation low for some time. In Australia, government support is at historic highs and, in the US, the new Biden Administration proposed a large additional fiscal support package. This has boosted confidence that fiscal policy will continue, providing markets with a solid foundation for 2021.

Vaccine rollout

The December 2020 quarter saw very positive vaccine trial results emerge from Moderna, Pfizer-BioNTech and AstraZeneca and also the start of the vaccine rollout globally. That said, there are large divergences in the rollout, with Israel and the UK leading with their programs while other countries lag.

While vaccines alone will not halt the pandemic, the increased levels of certainty they provide about how we may start to control the virus are an important ‘shot in the arm’ for global growth prospects in 2021 and have been key in driving a shift to a brightening outlook from investors.

Acceleration in the shift to the new economy

The pandemic accelerated intense shifts in how economies and societies operate as millions were forced to work, learn, purchase and socialise remotely. Global trends that had been in place for some years, such as online retail sales, intensified and returns in this sector were boosted as a result.

Many technology exposures benefited from the pandemic and the ‘tech superstars’ (the ‘FAANG’ stocks - Facebook, Amazon, Apple, Netflix and Google), dominated share market performance in 2020 along with emerging energy platforms such as Tesla. These markets are now entering 2021 very fully valued for solid growth.

Markets like Australia and Europe with a limited technology exposure and more of a tilt to traditional ‘value’ stocks such as energy, property, materials and financials (banks) struggled for most of 2020 but as the year closed out, and the growth outlook brightened and broadened, these markets and sectors also started to recover as earnings improved. 

Where to from here?

As we enter 2021, financial markets have locked and loaded a considerable amount of good news. We think that the global recovery will continue for some years to come. In the shorter term, the economic recovery and markets may pause and consolidate through the first half of 2021 but as the vaccine rollout improves, a lift in growth over the latter part of 2021 and into 2022 should unfold, boosting superannuation returns.

Quality advice can help you to navigate through this ever-changing investment landscape. Speak to a financial adviser if you’d like some support to help secure your financial future.

 

Need more information?

  1. Check your super balance by logging onto ANZ Internet Banking and click on super
  2. Find out how to ensure hasty decisions don’t erode your super.
  3. Understand why your super balance keeps changing.
  4. Read our COVID-19 FAQs.

 

Make superannuation simple and straightforward

Smart Choice Super performance

Article

ANZ Smart Choice Super report: September 2020

The September 2020 quarter performed positively on the back of more encouraging COVID-19 vaccine trial news and signs of global economic recovery. See the results.

Article

ANZ Smart Choice Super report: June 2020

Markets bounced back during April and May as economies started to reopen, delivering positive results for the June 2020 quarter. See the results.

Article

ANZ Smart Choice Super report: March 2020

Strong performance over 2019 was challenged during the March 2020 quarter due to COVID-19. See the results.

ANZ Smart Choice Super report: December 2019
 

Strong investment performance continues for the second quarter of the 2019/20 financial year.

“ANZ Smart Choice Super” is a suite of products consisting of ANZ Smart Choice Super and Pension (PDF 189kB)ANZ Smart Choice Super for employers and their employees (PDF 186kb) and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees (PDF 198kb). The ANZ Smart Choice Super and Pension product is distributed by Australia and New Zealand Banking Group Limited (ANZ) (ABN 11 005 357 522). View the ANZ Smart Choice Super and Pension Target Market Determination (PDF 252kB). ANZ Smart Choice Super for employers and their employees and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees are MySuper compliant products issued pursuant to the latest PDS available at anz.com/smartchoicesuper. ANZ Smart Choice Super is part of the Retirement Portfolio Service (the Fund) (ABN 61 808 189 263) and is issued by OnePath Custodians Pty Limited (ABN 12 008 508 496, AFSL 238346, RSE L0000673) (OPC), the trustee of the Fund. OPC is a member of the IOOF Group of companies, comprising IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. The Australia and New Zealand Banking Group Limited (ANZ) (ABN 11 005 357 522) brand is a trademark of ANZ and is used by OPC under licence from ANZ. ANZ and the IOOF Group of companies (including OPC) are not related bodies corporate. ANZ does not stand behind or guarantee these products.

Before re-directing your super or moving your money into ANZ Smart Choice Super, you will need to consider whether there are any adverse consequences for you, including loss of benefits (e.g. insurance cover), investment options and performance, functionality, increase in investment risks and where your future employer contributions will be paid. 

This information is of a general nature and has been prepared without taking account of your personal needs, financial situation or objectives. Before acting on this information, you should consider whether the information is appropriate for you having regard to your personal needs, financial circumstances or objectives.

All fees are subject to change. Other key features are relevant when choosing a super fund, including performance.

Fee Analysis: Research conducted by SuperRatings Pty Ltd, holder of Australian Financial Services Licence No. 311880 at the request of OPC. For a copy of the latest SuperRatings research, click here (PDF 452kB) or call 13 12 87.

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