What does the coronavirus mean for your super?
During these uncertain times, its trusted, honest information and guidance on investment performance that you need – not hearsay on the internet or advice from well-meaning colleagues.
REI Super is committed to keeping its members and community updated on coronavirus (COVID-19) and how it impacts your super. To do this, we have developed an Information Hub with quick links and summarised information, updating this page regularly as the situation changes. Here are some important points to consider about your superannuation and how COVID-19 may or may not impact your fund.
Investment markets and super
Since the start of the market volatility (from 21 February 2020) we have seen markets whipsaw up and down within a single trading day. While there have been days where share markets have recorded material losses, there have also been days where markets have bounced from the previous day’s lows. Given this environment, the performance of the portfolios has also been variable.
It’s important to remember that one of the benefits of investing your super in a diversified portfolio is that underlying investments have different risk and return drivers, which means that they can behave different to each other. It’s impossible to attempt to predict how long or severe the COVID-19 pandemic will be. It’s likely that investment markets will be volatile until we see a peak in the number of infections.
What does history tell us?
From Black Monday in 1987 to the GFC in 2008, the stock market has faced a number of landmark declines. However, it’s vital to remember the cyclical nature of investment markets as each of these periods of volatility were followed by another of growth and recovery. While no two downturns are the same, the message then is the same now: don’t panic.
In the period following the GFC, between 1 March 2009 and 31 May 2016, ratings agency SuperRatings found that REI Super was one of only eight superannuation funds to achieve an accumulated return of more than 100% on its Balanced option. In other words, we were one of only eight funds to have doubled our members’ money over the period – and that’s even without the benefit of contributions. Our Balanced option achieved a 100.6% accumulated net investment return* between 1 March 2009 and 31 May 2016. However, keep in mind that past earning rates are not an indicator of future earning rates.
With superannuation being a long-term investment, it’s more important than ever to focus on long-term objectives. This means thinking carefully before making any changes. REI Super members have access to professional and cost-effective advice as part of their membership, so call the Member Helpline on 1300 13 44 33 if you need to discuss the investment strategies that are appropriate for you.