ESSSuper investment update: October – December 2023

Daniel Selioutine (General Executive, Investments) provides economic and market commentary for the October – December 2023 period for ESSSuper members.

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SuperRatings Pty Limited (ABN 95 100 192 283, AFSL No. 311880) (SuperRatings) is a third party superannuation research company providing data analysis, information and commentary to both the public and the superannuation industry. Established in 2002, it is the most widely used and accepted ratings firm in the superannuation industry. Refer to superratings.com.au for more information. Ratings are only one factor to be taken into account when choosing a super fund.

Emergency Services Superannuation Board (ABN 28 161 296 741) (ESSB), the Trustee of the Emergency Services Superannuation Scheme (ABN 85 894 637 037) (ESSSuper).

This investment commentary does not constitute advice. All investment figures quoted relate to before-tax performance of the relevant industry benchmark. Investment returns cannot be guaranteed as investment markets can be volatile. As a consequence, returns can be positive or negative. Past investment performance is not a reliable indicator of future performance.

Benefits in ESSSuper's Accumulation Plan, Income Streams and Beneficiary Account products are not guaranteed or underwritten by the Victorian Government or ESSSuper, and ESSSuper does not come under the jurisdiction of the Australian Financial Complaints Authority (AFCA).

The information contained in this update is of a general nature only. It should not be considered as a substitute for reading the relevant ESSSuper Product Disclosure Statement (PDS) that contains detailed information about ESSSuper products, services and features. Before making a decision about an ESSSuper product, you should consider the appropriateness of the product to your personal objectives, financial situation and needs. It may also be beneficial to seek professional advice from a licensed financial planner or adviser. An ESSSuper PDS is available on our PDS and handbooks web page or by contacting us.

Transcript

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Speaker 1 You're listening to exploring super the exclusive podcast for ESSSuper members. Christian Kueng Welcome to Exploring Super, the exclusive podcast for ESSSuper members. My name is Christian Kueng and I'm the manager of Member Education. Felicity Brasher My name is Felicity Brasher. I'm the group executive of Member engagement. Daniel Selioutine Happy to be here. Christian Kueng Yeah, so fantastic. So, Daniel, I believe you’re here to provide a bit of an investment market commentary. But firstly, could you perhaps give us a bit of an update on the December quarter? Daniel Selioutine Thanks, Christian. So November and December at the conclusion of 2023, were really, really strong return months in what we call duration assets, which is a complicated way of saying assets which increase and decrease in value when interest rates go up and down. And so we saw bonds as well as a certain segment of equities and listed infrastructure and listed property investments rally very, very substantially over that period. The rally in growth assets in particular was quite pronounced. It was heavily concentrated in US tech stocks in particular. Felicity Brasher Dan, thanks so much for that update. Inflation's been a really hot topic over the last few months. Could you maybe share some thoughts on inflation and what's going on in that space? Daniel Selioutine Yes, absolutely. The inflation and interest rates are really two sides of a similar coin. So when inflation is very high, our RBA (the Reserve Bank of Australia) increases interest rates, and they do that to slow the economy. Daniel Selioutine So when the US Fed indicated that may not need to happen, we saw the drastic repricing in financial markets that we did. Bond markets at the moment are pricing pretty aggressive interest rate cuts which is which has been quite a change. Felicity Brasher OK. Christian Kueng OK, Dan, that that's really quite interesting. Can you perhaps get a bit more specific about our portfolio? What are the key themes that you think are gonna be impacted? Daniel Selioutine Yes, certainly. I spoke to some of these thematics earlier when we discussed the December quarter and some of these performance indicators, or these trends, and these performance cycles, if you will, they last a little bit longer than a quarter. Felicity Brasher Yeah. Daniel Selioutine There's growth in rents coming out of that portfolio, so overall kind of real estate is mixed, I'd say. Felicity Brasher Dan that was a really good overview of our overall portfolio. If we look a little bit more specifically again for our Members and perhaps you can give us some details on the Accumulation Plan performance. Daniel Selioutine Absolutely, Felicity. A number of our Members will be aware that our investment options for a vast majority of those options they have investment objectives which are CPI linked and that is to say they seek to generate a return which is some premium above the CPI rate of inflation. Daniel Selioutine That option’s positively continued to maintain performance in the top 25% of its cohort in the Super Ratings PS survey till the end of Daniel Selioutine Felicity Brasher Ohh, that's terrific. Christian Kueng Yeah, that's excellent. Felicity Brasher Dan, thanks so much for coming in today and sharing your insights and we'll look forward to hearing you again on our podcast. Daniel Selioutine My pleasure. Christian Kueng Yeah. Thanks, Dan. Well, that wraps up today's episode of Exploring Super, the exclusive podcast for ESSSuper members. Christian Kueng If you'd like more information about our investment and products, please go to esssuper.com.au Felicity Brasher This podcast is of general nature only and does not take into account your personal circumstances.