30 May 2024
The first quarter of 2024 brought good news for investors. Stubborn inflation began to be brought into check and share markets around the world soared to all time highs in March.
GuildSuper benefited from these global trends, delivering strong returns to start the year. Here’s everything you need to know.
The big picture
Your super is invested across a number of different asset classes to create a diversified portfolio. These asset classes include equities, which are stocks sold on stock exchanges in Australia and internationally. It also includes alternatives, which refers to investments like infrastructure or property, and fixed interest, which includes bonds, along with cash.
Equities have performed strongly over the recent period, which suggests share markets are pricing in an economic scenario where inflation continues to be moderate, interest rates fall, but economic growth holds up.
The technology sector in international equities markets delivered a lot of growth this quarter with companies like Nvidia, which specialises in artificial intelligence, leading market gains as investors remain confident in their earnings growth.
Going forward
Despite the recent bounce in share markets providing good news, we expect market volatility to remain elevated during 2024.
That’s because there is a lot of uncertainty in terms of which direction interest rates will go in, which influences the economic backdrop and therefore our investments.
The strong performance in equities suggests markets are pricing in a ‘soft’ or ‘no landing’ scenario where inflation continues to be moderate, interest rates fall, but economic growth holds up.
However, interest rate markets are pricing more significant interest rate cuts which suggests a more pessimistic outlook on future economic growth.
There are also evolving geopolitical risks which in turn could create supply chain uncertainty.
Investment performance
Our Growth MySuper lifestage option outperformed peer medians over the March quarter. All GuildSuper options outperformed on a 12-month basis, with the Growing lifestage option producing first quartile performance.
GuildSuper’s MySuper Growing Lifestage option returned 6.2% for the quarter. MySyuper for the Consolidating Lifestage, designed to carry less risk for those closer to retirement, delivered 5.2% returns over the quarter.
Past performance is not a reliable indicator of future performance.