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ANZ Smart Choice Super report: December 2017


Published 13 February 2018

Our 1970s to 90s investment options all exceeded 10.5 per cent returns in the calendar year. Mark Rider explains.

In brief

  1. Investment options with the most growth assets – such as shares and property – were the best performers, thanks to a strong result from local and international sharemarkets.
  2. The standout result was the 1990s investment option, which delivered an 11.8 per cent return for the year.
  3. Investment options with more defensive assets – such as cash and bonds – also fared well, rising between 5.26 per cent and 8.79 per cent for the year.
  4. At the end of this article we’ve got some ideas on how you can make the most of your gains.

A robust sharemarket meant all ANZ Smart Choice Super lifestage investment options performed strongly in 2017, returning some of the best performances of past years.

As you can read in the table below, returns for the year ranged from 11.8 per cent for those born in the 1990s (which puts them in our 1990s investment option), to 5.26 per cent for the 1940s.

ANZ Smart Choice Super lifestage investment options performance (%)

Investment option (decade of birth)

3 months

6 months

1 year

3 years (p.a.)

1940s

2.38 3.06 5.26 3.85

1950s

2.78 3.61 6.31 5.18

1960s

3.86 5.25 8.79 6.66

1970s

4.72 6.53 10.70 7.81

1980s

5.10 7.10 11.57 8.35

1990s

5.18 7.25 11.80 8.46

2000s

4.98 6.99

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 December 31, 2017. p.a. = per annum. Past performance is not a reliable indicator of future performance. The inception of the 2000s investment option was on the 18th February 2017 and therefore only the three and six months performance data are available.
 

Our members belong to investment options based on their decade of birth: younger members’ savings are mostly allocated to “growth assets” (higher risk investments with higher potential returns), which lean toward “defensive assets” (lower risk investments with greater stability) as members age.

Options with the most growth assets – the 1970s, 80s, 90s and the 2000s – had the highest returns as Australian and global shares rallied.

In the ‘1 year’ column of the table above you can see how much your investment option grew in 2017, the ‘3 months’ column shows growth in the last quarter of the year (October to December), which was a particularly strong one. In the last column, ‘3 years’ you can see the average return over the past three years (2015 to 2017).

Why returns in ANZ Smart Choice Super increased

In brief

  • Global shares were mostly up in the December quarter, topping off a very strong year for sharemarkets. Fixed-interest assets (such as bonds) also did well. 
  • The Australian sharemarket also rallied strongly in the December quarter, with the S&P/ASX 300 index returning 7.7 per cent.
  • Sharemarkets were buoyed because talk of US tax cuts excited investors, the US economy continued to perform well, Australian business confidence and employment was solid, and interest rates remained on hold.

In detail

US shares were up again in the December quarter as a strong earnings season and the passing of the long-anticipated tax-reform legislation boosted investor sentiment. The weaker US dollar and solid global growth continued to drive emerging-markets' shares. While growth has continued to improve in Europe, its sharemarkets lost some momentum.

The Australian sharemarket rallied strongly in the last quarter of 2017, with the S&P/ASX 300 Index returning 7.7 per cent, outpacing many markets around the world.

Australian business confidence and employment have also been solid, and companies' earnings, following the mid-2017 dip, are now being revised up. The Reserve Bank of Australia kept interest rates on hold.

Around the world interest rates remained fairly steady, in line with expectations. And signs of economic growth were encouraging. In Europe and the US, central banks started to relax some of their intense activity to stimulate their economies – and they managed to do it without spooking investors or the market.

Global fixed interest outperformed local fixed interest, returning 0.9 per cent and 0.4 per cent compared with Australia’s 0.4 per cent.

How choose-your-own investment options performed

Those ANZ Smart Choice members that chose their own investments can see results for different assets they invested in, in the table below. In the past quarter, all asset classes had positive returns.

The highest return came from the Australian shares option, up 6.93 per cent in the three months to December 2017, and 11.27 per cent over the year. The international equities option (unhedged) also performed well, delivering returns of 5.17 per cent and 11.87 per cent over the year.

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

Investment option

3 months

6 months

1 year

3 years p.a.

Cash

0.34

0.69 1.38 1.69

Conservative

1.94

2.46 4.43 3.49

Moderate

2.96

3.91 6.77 5.43

Growth

4.09 5.68 9.49 7.18

Australian equities

6.93 7.97 11.27 8.44

International equities

4.89 8.89 17.56 9.90

Global property

2.79 3.56 5.53 6.24

Global fixed interest

0.78 1.24 2.68 3.06

Australian fixed interest

1.10 0.87

Global smaller companies

4.75 8.51 11.68
International equities (unhedged) 5.17 7.66 11.87

 


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 December 31, 2017. PA = per annum. Past performance is not a reliable indicator of future performance. Note the Australian Fixed Income fund’s inception was on 18th February 2017 and therefore only the three and six months performance data are available. The investment options for International Equities (unhedged) and the Global Smaller Companies started on the 25th May 2015 and therefore the three-year performance data is not yet available. The Global Small Companies investment option is not available to members of ANZ Smart Choice Super and Pension.


Members of ANZ Smart Choice Super for employers and their employees can access the latest returns across the full suite of investment choices online or by visiting the ‘Investment portfolio’ page via their ANZ Smart Choice Super account in ANZ Internet Banking.

(Note: The above investment returns are not applicable to QBE members.)

Build on your recent gains with these steps:

1. The above investment returns relate to super accounts only with the exception of members in ANZ Smart Choice Super – for QBE Management Services Pty Ltd and their Employees. To access the latest returns, please visit your ‘Investment portfolio’ page via ANZ Internet Banking. 

2. For ANZ Smart Choice Pension returns, click on the above options to access the detailed investment option summaries containing returns specific to ANZ Smart Choice Pension, or visit your ‘Investment portfolio’ page on ANZ Internet Banking.

3. Please note that past performance is not a reliable indicator of future performance.

 

 



Mark Rider
Mark Rider is ANZ Wealth’s chief investment officer, responsible for delivering an overarching investment strategy, including asset allocation, investment themes, investment manager and product selection and monitoring for ANZ Wealth in Australia. Before joining ANZ in 2013, Mark spent 15 years at UBS and 10 years at the Reserve Bank of Australia, making him a well-recognised and respected member of the Australian investment community.

 

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ANZ Smart Choice Super is a suite of products consisting of ANZ Smart Choice Super and Pension, ANZ Smart Choice Super for employers and their employees and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees (together ‘ANZ Smart Choice Super’). ANZ Smart Choice Super and Pension is a retail product issued pursuant to a Product Disclosure Statement (PDS). ANZ Smart Choice Super for employers and their employees and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees are both MySuper compliant employer products issued pursuant to a separate PDS for employer plans and PDS for QBE.

ANZ Smart Choice Super is issued by OnePath Custodians Pty Limited (OnePath Custodians) ABN 12 008 508 496, AFSL 238346 and distributed by Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522. ANZ is an authorised deposit taking institution (Bank) under the Banking Act 1959 (Cth). OnePath Custodians is the issuer of ANZ Smart Choice Super but is not a Bank. Except as set out in the relevant Product Disclosure Statement (PDS), this product is not a deposit or other liability of ANZ or its related group companies. None of them stands behind or guarantees the issuer or the capital or performance of any investment. Such investment is subject to investment risk, including possible repayment delays and loss of income and principal invested. Returns can go up and down. Past performance is not indicative of future performance.

ANZ Smart Choice Super and Pension received a Gold rating in SuperRatings’ 2019 product rating in both the Super and Pension categories. ANZ Smart Choice Super for employers and their employees received a Gold rating in SuperRatings’ 2019 MySuper product rating. SuperRatings does not issue, sell, guarantee or underwrite these products. Go to www.superratings.com.au for details of its ratings criteria.

This information is of a general nature and has been prepared without taking account of your objectives, financial situation or needs. Before acting on this information you should consider whether the information is appropriate for you having regard to your objectives, financial circumstances or objectives. ANZ recommends that you read the ANZ Financial Services Guide, the relevant Product Disclosure Statement, product and other updates which are available by calling Customer Services on 13 12 87, or visiting our website here or here (for employer members), and consider whether the product is right for you before making a decision to acquire or to continue to hold the product. 

Taxation law is complex and this information has been prepared as a guide only and does not represent taxation advice. Please see your tax adviser for independent taxation advice. The information on insurance cover is a summary only of the terms and conditions applying to the insurance cover. To the extent there is any inconsistency with the terms of the insurance cover provided by the insurer, the terms of the insurance policy will prevail. 

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 exit fees, other 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.

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This information may be subject to change. Updated information will be available free of charge by calling Customer Services on 13 12 87.