The last few weeks, and in particular recent days, have seen some quite dramatic events and market movements around the world.
Investment markets are continually moving every day. In fact throughout each day markets move up and down as investors re-assess the value of assets they hold based on how they see the future of the global economy.
There are an endless number of factors that influence how investors see that future. Often the major factor is the behaviour of other investors – that is if a lot of investors start to react the same way, others will join in for fear of being left on their own.
One thing is certain about investment markets, and that is that nothing is certain! So whilst it’s too early to say whether or not these investors have got it right, it is the case that most shares are a lot cheaper to buy this week than they were two weeks ago. So for those who can afford to ride out the short-term fluctuations of the market, they can now buy a lot more for their money.
Superannuation funds are exactly the sort of investors who can absorb the risk of short term volatility as they are investing with very long-term objectives in mind. The real test for super funds is not whether the value of their investments goes up or down from week to week, or even from year to year, it is more about the return on member’s money over the very long term, that is over ten years or more.
Rest assured HOSTPLUS is actively reviewing and analysing current events around the globe and, with the advice of our asset consultants JANA Investment Advisers, are talking to our pool of investment managers around the world, to ensure the fund is positioned appropriately to navigate these current events in the market.
Of course, memories of the Global Financial Crisis (GFC) – or the period of sustained negative returns that occurred between 2007 and 2009, are still fresh in everyone’s mind. There is nothing to suggest the last two weeks will develop into a sustained downturn like that.
It is worth noting though, that even periods like the GFC, even out over the long term. In fact the losses HOSTPLUS experienced in that two year period, which is generally regarded as the most significant market downturn in a lifetime, have already been made back up. Interestingly the Australian share market has not yet recovered its losses from that period and this confirms that the approach. HOSTPLUS takes to actively managing funds and diversifying across sectors has helped the Fund, and our members, outperform many other types of investments.
HOSTPLUS members should be confident and assured we are closely monitoring events and doing what we can to ensure the Fund stays on course to meet our long-term investment objectives. And, that’s something we have an excellent track record of achieving with a ten year return that places us in the top 5 of all funds in Australia.*
*Source SuperRatings Fund Crediting Rate Survey SR50 Balanced Index at 30 June 2011.