Investment update to 30 April 2024

Information for members with an Optimiser account

Published 27 May 2024

Global markets were generally down in April 2024 due to concerns about persistent inflation delaying interest rate cuts. However, share markets were bolstered over the quarter by strong corporate earnings, particularly from companies involved in Artificial Intelligence.

Brighter Super has delivered competitive returns during this period of uncertainty about interest rates and inflation.

Returns for our ready-made Multi-Manager options continue to be positioned in the top quartile for their categories in the SuperRatings Fund Crediting Rate Survey April 2024 for 1- and 5-year periods (Accumulation and Pension surveys)¹.

Continuing the trend in recent months, highlights of our performance are:

• For Accumulation accounts, SuperRatings ranked our Multi-Manager High Growth Fund and Multi-Manager Growth Fund as the highest-performing options in their categories for 5-years ended 30 April 2024.
• For Pension accounts, SuperRatings ranked our Multi-Manager High Growth Fund as highest-performing option in its category for 5-years ended 30 April 2024, and our Multi-Manager Growth Fund as second highest-performing option in its category for the same period.

The table below shows returns for our ready-made options over the 1- and 5-year periods ended 30 April 2024².

Brighter together

From 31 May 2024, we are streamlining our investment options and improving our fee arrangements.

Visit brightersuper.com.au/brighter-together to learn more about the changes and watch a short video featuring Brighter Super CEO, Kate Farrar and retirement advocate, David ‘Kochie’ Koch.

Market summary

During April 2024, major equity markets stayed focused on the likelihood and timing of anticipated interest rate cuts, but this didn’t eventuate.

Inflation plateaued in several regions worldwide during the March 2024 quarter, whilst some measurements of economic activity have pointed to a resilience in private demand such as consumer spending. This has raised concerns that Central Banks may be forced to maintain interest rates at current levels for longer.  

The MSCI World Index (hedged to AUD) fell 3.2% over the month, while Emerging Market equities gained 0.9% (unhedged).

US equities declined in April 2024, with the S&P 500 stock market index falling by -4.1%. Concerns about ongoing inflation potentially drove weakness in sectors such as Real Estate and Information Technology, which tend to be sensitive to higher levels of interest rates.

Regarding economic activity, annualised Gross Domestic Product growth in the US decelerated to 1.6% for the March 2024 quarter, which was well below forecasts.

In Europe, the MSCI AC Europe Index fell 1.2%, reflecting weaker sentiment in broader Developed Markets. Inflation expectations for the Eurozone have fallen recently, potentially paving the way for policy easing by the European Central Bank this year.

The Eurozone saw stable inflation, at 2.4%, in April 2024 (on an annualised basis). In contrast, UK equity markets were stronger, benefiting from a shift in investor sentiment to sectors such as Financials and Resources.

In Australia, the ASX300 stock market index fell -2.9%, with most sectors reporting declines. Only the Materials and Utilities sectors saw gains, with Utilities outperforming most other sectors. Inflation for the March 2024 quarter was higher than expectations, at 3.6% for the previous 12 months.

Persistent pricing pressures, particularly in services, have challenged the Reserve Bank of Australia’s  expected timeline for returning inflation to its target range.

The Fixed Income sector experienced volatility, with significant rises in government bond yields in both the US and Australia, reflecting investor concern over prolonged inflationary pressures and the potential for sustained higher interest rates.

The Australian Government 10-Year Bond Yield rose by 0.46% to 4.42%, and the US Government 10-Year Bond Yield increased by 0.48% to 4.68%.

The Australian Dollar appreciated against most major currencies, rising 0.5% against the Euro, 0.4% against the Great British Pound, and 3.5% against the Japanese Yen. However, the Australian Dollar fell 0.5% against the US Dollar.