Equip Super’s Balanced Growth option has delivered a 9.23 per cent return for the financial year ended June 2024, down from 10.1 per cent for FY23.
Pointing to rising interest rates and ongoing cost-of-living pressures, Equip said that it has been a “positive” year for members in the face of an increasingly challenging landscape.
“In the face of concerns over a potential US recession and rising interest rates earlier in the year, the majority of our members have enjoyed strong returns,” said chief investment officer Andrew Howard.
“The strong result achieved by the Balanced Growth option builds on the impressive long-term returns delivered to our members, with this option returning an average of 8.19 per cent per annum over the past 15 years.”
The fund said that recently buoyant equity markets, powered by expectations of rate cuts, “significantly” enhanced returns, particularly for members in its higher growth options.
Namely, Equip’s Growth Plus strategy delivered an “exceptional” 12.12 per cent over the financial year, down from 14 per cent over the previous period.
Moreover, its Retirement Income Balanced Growth option delivered 9.88 per cent return for FY24.
While the strength of the US and Australian sharemarkets provided a tailwind for returns, Howard said he was pleased to see “strong” performance from Equip’s infrastructure portfolio, while also benefiting from maintaining a lower exposure to commercial property.
However, he said that the fund remains “cautious of potential heightened market volatility leading up to the US presidential election in November,” noting “inflation has moderated, but it remains elevated, possibly limiting future interest rate cuts”.
“So while we are pleased to deliver our members really positive returns over the past couple of years our focus remains on maintaining a diversified investment strategy capable of navigating various market environments,” Howard said.
Last month the $34 billion fund introduced new personalised services, including a dedicated retirement centre, in a bid to implement a “fund-wide” focus on retirement.
Namely, research from Equip found that Australians have a preference for direct, personal contact from their funds to better understand retirement options and pension products.
“While other funds simply focus on accumulating super balances, Equip Super has recognised through comprehensive research that those nearing retirement have an unfulfilled need. We feel a medium-sized fund such ours is well positioned to cater for those needs, to become Australia’s leading retirement destination,” Equip CEO Scott Cameron said in June.
