Updates from our Chief Investment Officer and Chief Executive Officer17 Mar 2020 3 min read
From Ben Squires, our Chief Investment Officer:
“Following on from our last update, we have witnessed further violent reaction in markets as the rate of infection of Covid-19 continues to increase. Governments and central banks around the world have been swift in response and with the US declaring a state of emergency, US share markets rallied strongly on Friday, closing 9% higher. It is likely that markets will be volatile over the coming months and news headlines will only add to this volatility. At times like these, it’s even more important to remain calm and, if possible, speak with a representative from the Fund before you make a decision to switch your investment option.
For long-term investors, the medium-longer term economic and market outlook remains intact. In fact, recent share market falls present opportunities for the Fund to increase exposure to high quality companies that are better positioned to take advantage of weaker economic conditions and gain market share. What is important to remember is that the last decade has seen returns well above the long-term average and markets tend to mean revert to their average over time. We continue to be above the long-term average, so the recent falls have not eroded gains made over this period. In addition, the portfolio is well diversified across asset classes, countries and sectors with the aim of weathering all economic conditions.
We are continuing to monitor several indicators for signals of recovery or further deterioration and these include:
- New cases of Covid-19 in China and the rest of the world
- Evidence of Chinese workers going back to work and factories re-opening, supply changes being restored
- Domestic announcements in relation to travel bans on China, tourism numbers from other countries
- Typical economic indicators such as business confidence, unemployment, job openings, etc.
At this point, we are seeing attractive opportunities to rebalance across our active share managers. The monetary and fiscal stimulus provided by the major economies around the world will provide a significant platform for economic growth once the pandemic is declared under control. It is difficult to predict the timing of this so the Fund continues to monitor these events closely.
From Laura Wright, our CEO:
We understand that the current global environment is an unsettling one, to say the least. In addition to concerns about our health and that of our families, friends and the wider community, people are worried about stock market volatility and the impact on investments such as super.
I’d also like to reassure our members about our Trustee office and general operations. As at the time of this email, all our Trustee offices remain open and all aspects of Fund administration continue to operate. We have a thorough and up-to-date business continuity plan, and strong systems and technology in place should we need to amend our work practices in any way in the coming weeks or months. Within our offices we are implementing strict hygiene practices and protocols for internal and external meetings.
We will continue to provide our members with regular updates and remind everyone to stay safe, practise strict hygiene measures and look after yourselves.