It has been a very volatile start to 2020 – for financial markets, and for most of us personally as we’ve responded to the changed circumstances that the COVID-19 pandemic created.
HESTA Core Pool has delivered a result of 0.00% for the 2019/20 financial year on the back of market concerns around the economic effect of coronavirus.
* 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.
** Core Pool is the default option for HESTA super.
“While these are not as positive as the results we usually like to report, they are better than what might have been had we not taken a more defensive stance in our investment strategy in mid-2019,” says Chief Investment Officer Sonya Sawtell-Rickson.
“While we didn’t predict a global pandemic, we were concerned that valuations in some markets had become stretched. We were also approaching the later stages of the business cycle, which historically has been a lower returning environment. This positioning has helped provide HESTA members some protection from the recent falls.”
The impact of coronavirus
Economic forecasts suggest the impact of coronavirus is far from over. “Because of this it’s no surprise that we have seen significant drops in financial markets, as they respond to these changed circumstances."
But short-term fluctuations should be put into perspective. As Sonya notes, "It is probable to see a negative return 3-4 years in a 20-year period and in the past, these downturns have not stopped us achieving our long-term objectives."