|Updated: 6 April 2020|
Anyone who has read the news headlines lately will know the global share market has taken a hit because of the coronavirus (COVID-19) pandemic and recent oil prices crash.
Understandably, some members may be concerned about the effect market volatility will have on their superannuation, but the message from our Chief Investment Officer, Troy Rieck is don’t panic. Read on to find out why.
What is happening in the market?
In the past few weeks, share markets around the world have experienced a sharp sell-off. Closer to home, the Australian share market has fallen; however, it isn’t time to make hurried decisions about your finances.
The main reason for these falls is a growing concern about the infection rate of COVID-19, paired with the recent crash in oil prices and the impact these factors might have on economic growth and company profits. It is possible that COVID-19 news headlines are triggering sales on long-held positions in technology and other stocks, also impacting the market. These behaviours may settle once we know the long-term outcome of Coronavirus.
How is this affecting my superannuation?
Whilst some LGIAsuper members have chosen to invest in more aggressive or conservative investment options, most members are invested in the Fund’s default MySuper LifeCycle option. Whilst this option does have exposure to international and Australian shares, it currently has approximately 50% of funds allocated to other asset classes which limits the impacts of share market volatility.
What is LGIAsuper doing to protect my investments?
In the lead up to the current crisis, LGIAsuper undertook a number of actions to protect members’ investments during this volatile period. These included:
As the situation evolved into a pandemic, LGIAsuper took further steps to support member returns, including:
Our focus on delivering good returns regardless of market conditions is paying off, with our default LGIAsuper - MySuper Lifecycle Under 75 investment option recently ranked the number one MySuper Option in the market this financial year to end of February 2020 in the latest SuperRatings FCRS February 2020 survey results. Our LGIAsuper Diversified Growth investment option was also ranked number two in the Diversified Growth category.
Looking long-term, LGIAsuper will continue to run a diversified investment program, spreading members’ money across a range of share market, property, infrastructure, debt and other growth assets. These growth strategies are then combined with allocations to government bonds, cash, and investment grade corporate debt to generate an appropriate overall mix of returns, and to help protect investments during times of market distress.
What should members do now?
It is important to avoid making snap decisions driven by media headlines. Superannuation is a long-term investment for most members, so keeping your investment timeline in mind is crucial when the market is turbulent.
We know some members will be looking at their options and we respect your right to control your own investment strategy. However, we strongly encourage our members to seek personalised advice from one of our experts before making decisions regarding your financial future.
Right now, our advice to members is:
To find out more, please call us on 1800 444 396.