Negative returns and your super
Investment performance has generated a lot of attention in the past two years. Previously, investment markets were extremely strong, and we had grown accustomed to seeing double-digit returns on our super statements.
We know that some of you are concerned about negative returns. While weak investment markets and negative returns can be unpleasant, they are a completely normal part of the investment cycle. History has shown that after a downturn, investment markets tend to bounce back, usually to higher levels.
Your super is invested in shares, property, cash and other types of assets, depending on which of our investment options you may have chosen since you joined (if you didn’t make a choice, your super was invested in our Balanced investment option). When the value of these assets falls, so does the value of your super.
Your super has the best potential earning power over the long term when you invest it in our Balanced or Equity Plus investment options, but there will always be years where you will experience negative returns.
In negative markets it’s natural to want to protect your super by switching out of investment strategies with negative returns and into a defensive option like Cash Plus.
You should only consider switching to a defensive investment option like Cash Plus if it is in line with your long term investment strategy.
A reactive switch into Cash after a negative return means that you may run the risk of missing out on a rebound when investment markets recover. In addition, switching to Cash means you may achieve lower returns over the long term. You should always seek professional advice before making changes to the way your super is invested.
The most important thing you can do to ensure you have comfort and control over your super is to get access to the right advice, and set yourself a long-term investment strategy.
We know how important it is for you to seek professional advice about super. That’s why we’ll get you started by paying for your first single-issue superannuation advice phone call to our advice partner Money Solutions*.
With Money Solutions, there are no trailing fees or hidden commission payments- you just get reliable, professional advice for a flat fee.
When you call Money Solutions, your personal Money Coach will work with you to set a long-term investment strategy so you can keep your eye on the bigger picture. Call us on 1800 222 071 and ask to be put through to a Money Solution Money Coach.
*The Trustee is not responsible for, and does not accept liability for, the products or services or actions of Money Solutions. You should use your own judgement before taking up any product or services offered by Money Solutions (AFSL 258145).
The investment of your super is outsourced to a mix of professional investment managers. Each appointed investment manager is an expert in their field, and invests your super according to strict rules.
Outsourcing the investment of your super also reduces risk by making sure that your eggs are not all in the one basket. Diversification means that your super is protected from short term volatility because it is invested in a range of asset classes.
We have a long term investment focus (just like we suggest that each of our members should have) so the potential for short term negative returns is factored into our performance benchmarks and our investment methodology. We’re not taking risks with your super by changing the way we invest money just because of short term performance. Instead, we continue to focus on delivering the best possible performance for our members, with an appropriate level of risk.
Important Information: The information in this document is of a general nature only and is not a comprehensive study. It has been prepared without taking account of any of your objectives, financial situation or needs, and before acting on the information, you should consider its appropriateness having regard to your objectives, financial situation and needs. You may wish to consult a licensed financial adviser when doing this. A copy of the current TWUSUPER Product Disclosure Statement should be obtained from us and considered carefully before you make any decision about whether to acquire the product or continue to hold our products. Issued by TWU Nominees Pty Ltd, ABN 67 002 835 412, AFSL No 239163 as the trustee of TWUSUPER (ABN 77 343 563 307).