A tactical overweight allocation to US equities has helped bolster the returns of AMP’s three largest Lifestage cohorts.
The firm has announced a return of 11.14 per cent for members of its AMP MySuper 1970s superannuation fund option for the financial year 2024.
The option, its largest by funds under management, uses a high-growth asset allocation.
AMP MySuper 1980s and 1990s members, too, benefited from a high growth allocation, notching returns of 11.31 per cent for the financial year.
“From December to June, our portfolios had a tactical overweight to US equities which saw strong returns as our funds continued to outperform their benchmarks,” said Anna Shelley, chief investment officer at AMP.
This approach was bolstered by positive active asset allocation and security selection from several of AMP’s underlying managers, with the funds benefiting from positioning for market themes like the strong surge in AI adoption across both US and global markets.
“Sharemarket gains were once again led by the US tech sector,” Shelley said.
“Capitalising on the universal appetite for AI adoption together with our high strategic allocation to global listed equities allowed us to record strong performance for our members.”
The CIO outlined “very strong” prospects for global equities over the long investment time frame AMP considers for its members.
“AI-led productivity benefits should underpin GDP growth and corporate earnings for many years to come,” Shelley said.
In combination with a decade of spending on clean energy infrastructure, this results in a very positive outlook for equity and corporate debt markets, Shelley said.
Other areas that helped deliver high returns were increased exposures to private debt and diversified credit and a low allocation to direct property, which is the only negative returning asset class this year.
The annual results beat out some of AMP’s industry counterparts like AustralianSuper’s return of 8.46 per cent from its default balanced option and HESTA’s 9.1 per cent for its MySuper Balanced Growth default option.
Looking into the next financial year, Shelley observed potential buying opportunities emerging from short-term market uncertainty in the lead-up to the US elections in November.
In this event, AMP would “look to take advantage of sharemarket weakness in delivering maximum returns for our members”, she said.
“Diversification remains key to our strategy in helping deliver sustainable investment returns over the long term. We will be implementing our annual strategic asset allocation review later in the year to ensure our portfolios can continue to help more Australians retire with confidence,” Shelley said.
