The $90 billion fund delivered double-digit returns in its flagship Growth option last year and remains optimistic for 2025.
Rest has seen its second consecutive calendar year of positive returns for its MySuper Growth investment option, returning 11.19 per cent in 2024.
This, the fund said, was underpinned by the continued strong performance of listed sharemarkets and international equities in particular.
According to Rest, Growth has delivered long-term annual returns of 8.34 per cent since it began on 1 July 1988.
Moreover, the fund’s High Growth option and its Sustainable Growth option also benefited from the strong performance of sharemarkets, returning 14.09 per cent and 14.08 per cent, respectively, for the calendar year.
Commenting on the results, interim co-chief investment officer, Kiran Singh, agreed that global shares remained a standout performer over the year, particularly in the US.
In fact, Singh said that, with several banks moving to ease monetary policy and markets responding positively, 2025 is set to benefit from these same tailwinds.
“Equity valuations are elevated but, for now, they are supported by continued economic resilience and earnings growth,” he said.
“Inflation is coming down in major developed economies and employment is generally softening. We expect central banks will continue to ease rates. We will watch policy uncertainty in the US closely, but we broadly expect outcomes to be market friendly.
“Of course, upside surprises to inflation and inflation expectations risk negatively impacting rate trajectories should they arise. However, we firmly believe that being selective and focusing investment into assets with good fundamentals – strong balance sheets and stable and consistent earnings – are expected to support the continued generation of strong returns for members.”
Meanwhile, Rest’s interim co-CIO, Simon Esposito, underscored the five long-term megatrends that the fund is expecting to see shift markets more broadly: decarbonisation, deglobalisation, demographics, digitalisation, and debt and central bank policy.
These trends, Esposito said, are informing Rest’s scenario modelling for future market expectations.
“Thanks to the influence of these megatrends, we believe investors won’t be able to just rely on a uniform increase in valuations across all assets, but will need to be more selective to be successful,” he said.
“We continue to seek investment opportunities that are well-placed to benefit from these megatrends, and add to those we’ve secured recently.”
