Investment Update: The financial impacts of COVID-19

- 18 Mar 2020

Daniel Selioutine, Head of Investments, takes the opportunity to review market activity and the Fund’s performance in light of recent events.

Market Update:

At 28 February 2020, all Accumulation Plan Investment Options outperformed their investment objectives over one, three and five year periods. After an unusually strong 2019, global equity markets declined sharply in February and March 2020 due to the impacts of the coronavirus.

The equity market declines in March 2020 were particularly sharp, however their impact was dampened by our Options being diversified across many countries and many asset classes. The Shares Only Option was the most adversely impacted, being wholly invested in equity markets.

Accumulation Plan Investment Performance to 28 February 2020

^ Cash Option returns are depicted gross of tax due to the Annual Objective being a gross of tax objective. The SSF DB investment objective decreased from CPI + 5.5% to CPI + 5.25% in 2019. Returns are depicted relative to the lower objective over one and three year periods.

The SSF DB and ESSS DB were similarly impacted by declining equity markets in February and March 2020. Performance to February 2020 was in excess of investment objectives over one, three and five years.

Outlook:

The coronavirus outbreak continues to evolve and the outlook for financial markets remains uncertain at this time. While the outbreak is expected to have a short temporary impact before financial markets eventually recover, there is increasing evidence suggesting the strategy of containing the virus may result in adverse economic impacts being more protracted than expected. Positively however, developed market governments and central banks have signaled their willingness to stimulate the economy (i.e. by decreasing interest rates or increasing government expenditure) which should provide support to financial markets over the medium term.

Accumulation Plan Investment Options are positioned more defensively than the typical super fund due to our downside protection philosophy.  

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.

Emergency Services Superannuation Board ABN 28 161 296 741 the Trustee of the Emergency Services Superannuation Scheme ABN 85 894 637 037 (ESSSuper). The information contained in this document 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 at www.esssuper.com.au or by calling 1300 650 161. 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.