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ANZ Smart Choice Super report: March 2021

Published 31 May 2021

Pandemic rebound boosts returns

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

Investment Option

3 months

1 year

3 years (p.a.)

5 years (p.a.)

1940s

0.98

8.74

 4.83

4.39

1950s

1.42

11.48

 5.49

5.46

1960s

2.72

18.93

 6.95

7.20

1970s

3.55

23.49

 7.88

8.43

1980s

4.00

25.76

 8.30

9.01

1990s

4.08

26.25

8.43

9.16

2000s*

4.04

25.80

8.21


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 March 2021 (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 March 2021 quarter (the ‘3 months’ figure), and over the past one, three and five years.

All of ANZ Smart Choice Super’s Lifestage investment options saw positive returns during the March 2021 quarter. Investor sentiment has become more optimistic in the first few months of 2021 as COVID-19 vaccines have started to roll out, supporting reopening, and all signs point to the global economic recovery powering on well supported by governments and central banks for some time yet.

Over the year to March 2021, we can see just how much the pandemic recovery has played out in investment markets with the Lifestage funds returning very strong performance of 8.74% for the most defensive to 26.25% for younger cohorts. Please read below for an Investment Team update on how recovery from the pandemic recession has lifted investment performance.

The SuperRatings survey groups funds together with similar allocations to growth assets and Smart Choice funds have performed above the median manager in the 1980s, 1990s and 2000 Lifestage options over the year. ANZ Smart Choice Portfolio Manager, Manish Utreja, said “We’ve entered a new phase of the economic cycle and our strategic, disciplined approach has supported members to achieve strong returns that will keep them on the path to achieve their retirement goals.”

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1940s

0.98

8.74

 4.83

4.39


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 March 2021 (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

1.42

11.48

 5.49

5.46


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 March 2021 (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

2.72

18.93

 6.95

7.20


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 March 2021 (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

3.55

23.49

7.88

8.43


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 March 2021 (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

4.00

25.76

8.30

9.01


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 March 2021 (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

 4.08

26.25

8.43

9.16


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 March 2021 (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*

 4.04

25.80

8.21

_


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 March 2021 (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 key

Effective diversification is the cornerstone of ANZ Smart Choice Super’s Lifestage investment philosophy. A portfolio is built across a range of assets, including growth assets such as Australian and international shares and property, and defensive assets including fixed interest securities and cash, and automatically adjusts depending on your age and time to retirement.

Returns across Lifestages explained

Younger members (for example 1990s and 2000s) are more heavily invested in growth assets. This means these members have seen their super balance perform very strongly as economies have started to reopen following the pandemic recession, boosting confidence in the earnings outlook.

Older members (those in the 1940s to 1960s Lifestage options) have also seen very positive returns to their super balances over the year but as they have more limited exposure to growth assets the returns aren’t at the scale of the younger cohorts. That said, these members were better able to weather the storm caused by the pandemic as their returns shielded by the larger exposure to defensive assets such as cash and bonds.

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^

-2.98

-1.74

2.90

Australian shares

3.92

33.86

9.26

9.79

Global fixed interest

-2.59

1.23

2.88

2.43

Global property

6.10

25.90

4.31

3.05

Global smaller companies

10.01

39.59

10.51

12.28

International shares (hedged)

5.53

42.54

10.53

11.60

International shares (unhedged)

5.57

20.81

11.76

12.16

Cash

0.09

0.38

0.91

1.13

Conservative

0.39

6.39

4.06

3.80

Moderate

1.47

11.77

5.50

5.60

Growth

2.72

19.03

6.96

7.52



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 March 2021 (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.

With investors flocking to growth assets and fleeing from defensive assets, there was a large sell-off in bond markets in February. This meant our Australian and global fixed interest options delivered a negative return. Conversely all other options performed strongly, ranging from 3.92% for the Australian shares option to 10.01% for the Global Smaller Companies option. Over the year, returns were extremely positive with over 20% gains across all options excluding Australian and global fixed interest. However, it is important to note that these strong gains are currently driving from very poor returns in March 2020.

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

Vaccine rollout shapes the path to reopening and economic recovery

The first few months of 2021 saw an upward trend in COVID-19 infections, particularly in mainland Europe and various South American countries. India, where the problem of accurately classifying COVID-related deaths has been particularly acute, had a dramatic spike in infection rates and, tragically, a significant death rate as hospitals became overwhelmed with cases. India’s devastating second wave highlights the possibility of more deadly and transmissible COVID mutations, which may disrupt the progress made by current vaccines.

Progress on the vaccine rollout was always set to be the central feature of economic reopening in 2021. While over 170 countries have started their COVID-19 vaccine programs, there is huge disparity in the rollout programs and levels of reopening with some emerging countries that have high rates of infections well behind.

The UK has led the way to reopening with the Government stating that the country is on track to offer a first dose to all adults by the end of July 2021. In the US the rollout has been delivered rapidly with the very effective mRNA vaccines dominating the rollout. Confidence in reopening has improved with around 30% of the population already receiving one dose, a good sign when considering how the US was tracking before their program started. In contrast, Europe remains plagued by a slower rollout than other developed countries with concerns over the AstraZeneca vaccine and ties to rare blood clots persisting, and withholding supply. Australia’s program is also lagging with signs that confidence in some vaccines has waned as well as a more relaxed community sentiment given our relative success in containing the virus and managing outbreaks.

While vaccine rollout issues may continue, including supply and distribution, and levels of effectiveness, these challenges should ease in time, allowing economies to reopen and keep the unfolding global recovery on track.

Inflation expectations lift but rates are unlikely to rise any time soon

Economic optimism has also been boosted by the passing of US President Biden’s record USD $1.9 trillion stimulus package. We expect this will support consumer spending at a time when the US economy is already gaining momentum. In March 916,000 jobs were added, a figure that points to reopening and economic improvement and we expect this upward trend will continue.

In global news, the Global Composite PMI survey, a key indicator for economic activity, rose to a near seven-year high in March, suggesting the global economic recovery remains confidently underway, although likely peaking.

The more upbeat global economic outlook saw investors have more confidence in growth assets, like shares, which have powered ahead on the back of upward revisions to the earnings outlook. Conversely, investors fled from defensive assets, resulting in a huge sell-off in bond markets in February.

Increased economic confidence has led to concerns that inflation will rise, and that central banks, such as the Reserve Bank of Australia and the US Federal Reserve, may start to taper their extraordinary monetary support going forward. Central banks have largely pushed back against these expectations as it’s actual inflation rather than expected inflation that’s of most concern and drives their policy outlook.

While inflation is likely to rise in the coming months, due to higher oil prices and the effects of the 2020 pandemic slowing, it’s expected that any spike will be temporary and central bankers want evidence that there’s a sustained upward shift supported by a continued fall in unemployment before raising rates. However, the quantitative easing programs could be eased some time before rate increases commence. Overall, we expect central banks to keep monetary policies ‘loose’ to further support the economic recovery and jobs.

What may be ahead?

The COVID-19 pandemic intensified trends that had been in place for some years, such as online retail sales, as more people were working and shopping from home. This saw growth stocks, primarily in the technology sector (including the ‘FAANG’ stocks - Facebook, Amazon, Apple, Netflix and Google), see huge gains in 2020.

In 2021 economies are beginning to heal and we’ve seen elevated returns from value stocks, such as banking, which tend to benefit most from reopening. While returns are unlikely to continue at the high levels we’ve seen in the year to date, we consider returns should remain robust going ahead as economies reopen and jobs recover.

If you’d like guidance on making the most of this new phase in the economic cycle to secure your financial future, please speak to a financial adviser.

 

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.

 

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Smart Choice Super performance

Article

ANZ Smart Choice Super report:
December 2020

The December 2020 quarter performed positively on the back of a brightening outlook for the global economy and the start of COVID-19 vaccine rollout.   

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.

“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). 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 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.

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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.

For more information, visit superratings.com.au. SuperRatings does not issue, sell, guarantee or underwrite this product. Learn more about SuperRatings' criteria.

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