A resilient recovery: that is what we have seen across the global economy and financial markets during the past 12 months.
Australia’s Gross Domestic Product (GDP) has surpassed its pre-COVID pandemic levels. In fact, Australia has displayed one of the strongest economic rebounds in the world as we emerge from the pandemic-induced recession.
This positive economic data has boosted financial markets. We’ve seen many financial markets across the globe achieve record valuations over the past year.
Throughout the 2020/2021 financial year, HESTA’s investment options have performed strongly.
* Investments may go up or down. Past performance is not a reliable indicator of future performance. The returns shown are net of investment fees, indirect costs and taxes.
**Balanced Growth is the default option for HESTA Super, while a blend of Balanced Growth and Conservative is the default strategy for the HESTA Income Stream.
As we look to the year ahead, we see a changing investment landscape. Navigating this will be the key to delivering strong investment returns.
Inflation risk continues to be present, as questions remain about the true pace and extent of inflation. This has led to volatility across bond yields. Similarly, it can also cause volatility in equity markets. Because some equity markets are at all-time highs, this can slow the expected rate of future growth. If future growth is outpaced by inflation, then equity markets can experience increased volatility.
However, at this stage, these are simply risks that are being managed by the HESTA Investment Team. It’s what we do every day.
Exciting progress is being made on climate action as rising global ambition is accelerating the transition to low carbon investments. The US has already signalled the need for faster change by hosting the Leaders’ Summit on Climate back in April. The next milestone event is the United Nations Climate Change Conference this coming November.
At HESTA, we continue to be a leader in sustainability, and we forecast a wave of investment opportunities for those who move first. Already, HESTA is invested in promising and innovative private equity opportunities at the forefront of climate action, from renewable energy to agriculture.
This is an exciting year for HESTA. We are currently expanding our team and internalising our Australian share portfolio, which will improve our ability to generate long-term returns for our members.
At HESTA, our investment team is ready to handle all challenges and opportunities for the year ahead.
Whilst reports show a strong economy and stock market, we’ve all felt the effects of the past 12 months differently. The way we work and live has altered. This may have had a positive or negative effect on us financially.
The key is to not be overwhelmed by the financial noise. Instead, reflect on how you and your family are positioned financially compared to 12 months ago. Has it changed the way you think about spending, saving and investing?
If you need some guidance for the financial year ahead, speak to the team at HESTA. We’re ready to help.
1 Past performance is not a reliable indicator of future performance. Investments may go up or down. The returns shown are net of investments fees, indirect costs and taxes.