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Investment update – October

Posted 1 October 2015 10:27am

Over the financial year to date, investment market volatility has risen with falls in commodity, equity, and some currency market prices.

Exposure to risk assets reduced earlier in 2015

The trustee of CSCri, Commonwealth Superannuation Corporation (CSC), reduced exposure to risk assets ahead of these events for members invested in the default option, MySuper Balanced.

This decision was taken because, at that time, the prices of many equity, commodity and currency markets had risen above levels that could be justified solely on the basis of economic fundamentals. 

This means that while CSC default option superannuation balances are not immune to the asset price falls of most recent months, these falls are having less of an impact than they would otherwise have had on our members’ balances. 

The relatively modest underperformance of CSC’s default options highlights the benefits of diversification and dynamic risk control embedded in these portfolios.

Monitoring ongoing developments

CSC is now monitoring unfolding developments carefully to ensure that new information remains consistent with current investment strategies.  To date, we note that, as expected:

  • developed-market growth is continuing to recover, but only modestly, limited by high levels of public and private sector debt;
  • global inflation remains low;
  • currency dynamics are redistributing growth across regions; and
  • liquidity risk (particularly in fixed income markets) is higher than historic levels.

Actions you can take

General advice

This investment update provides general information only. It has not taken account of your personal objectives, financial situation or needs. Before acting on any general information or advice, you should have regard to your own objectives, financial situation and needs.

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