Investment update to 30 September 2024

4 November 2024

Many of Brighter Super’s options delivered strong returns in September 2024. Our Growth and Balanced options continue to deliver some of the industry’s highest returns, as shown in SuperRatings’ September 2024 survey¹.

Returns for Brighter Super’s diversified investment options for periods ended 30 September 2024 are listed below².

Strong returns continue for Growth and Balanced options

Brighter Super’s Growth and Balanced options achieved high rankings in SuperRatings’ September 2024 Fund Crediting Rate Survey, which is used to benchmark top-performing options across the Australian superannuation industry¹.

Accumulation accounts:

• Our Growth option ranked as the highest-performing option in the SR50 Growth Index for 5 and 7 years ended September 2024.
• Our Balanced option ranked as the highest-performing option in the SR50 Balanced Index for 5 years and 7 years ended September 2024.

Pension accounts:

• Our Growth option ranked as the highest-performing option in SRP50 Growth Index for 5 and 7 years ended September 2024.
• Our Balanced option was ranked as highest-performing option in the SRP50 Balanced Index for 7 years ended September 2024, and second-highest performing option in the SRP50 Balanced Index for 5 years ended September 2024.

Returns for Growth and Balanced options were also in the top quartile in their respective index for 1 and 3 years to 30 September 2024, for both Accumulation and Pension accounts.

Brighter Super’s default MySuper option for Accumulation accounts continues to deliver competitive returns, which is reflected in our rankings in SuperRatings’ SR50 MySuper Index.

• Top quartile returns and ranked as 5th highest performing option for 3 years ended 30 September 2024, a period that included the COVID-19 pandemic and recovery.
• Above median returns for 1, 5 and 7 years ended 30 September 2024.

Market summary

Share markets were generally stronger during September 2024, with the MSCI All Countries World Index (hedged to AUD) rising by 1.84% and Australia’s ASX300 rising 3.07% over the month³.

The beginning of interest rate cuts in the US, along with significant stimulus measures announced by the Chinese government, were both supportive to share market returns.

US equities were stronger than other Developed Markets over the month, with the S&P 500 returning 2.1%. A key development in the US was the Federal Reserve decision to lower interest rates by 0.50%, which was the first rate cut since the COVID-19 pandemic. Inflation has continued to move toward the Federal Reserve’s 2% target, providing an opportunity to more evenly balance inflation targeting with maintaining strong employment.

In Asia, Chinese equities were noticeably stronger, returning 23.3% for September 2024. This followed a range of measures announced by the Chinese government with the intent to provide stimulus to the economy and the ailing property sector. It also included measures intended to signal support (and improve sentiment) for capital markets. Elsewhere, Japanese equities were again weaker, following the significant volatility experienced during August 2024.

The MSCI Europe Index was marginally weaker in September 2024, and performance was mixed across key geographies.  In September, the European Central Bank (ECB) again eased interest rates by 0.25% down to 3.5%. Euro area inflation is now tracking below the ECB target inflation rate of 2%, having moderated to 1.8% in September. However, a key reason behind the fall in headline inflation has been weaker energy prices which tend to be highly volatile, with measures of core inflation (that exclude food and energy) remaining above the ECB target.

The Australian equity market outperformed Developed Markets, returning 3.1% for the month. Equity markets likely benefited from positive sentiment linked to Chinese stimulus and higher commodity prices, with the Materials sector returning 13% for the month. The Information Technology sector also outperformed the broader Index for the second consecutive month, whilst Healthcare and Consumer Staples were weakest. GDP growth for the June 2024 quarter was released, showing a modest 0.2% rise. However, household consumption fell 1.1% over the quarter and GDP growth on a per capita basis continues to be negative.

Global bond returns were positive over September 2024, returning 1.1%, whilst Australian bond returns were also marginally positive at 0.3%. Bond yields were lower in the US, reflecting the decision by the US Federal Reserve to cut rates. Along with moderating inflation, this is supporting the narrative of additional rate cuts over the next year.  The US 10-year government bond yield declined by 0.13% to 3.79%, whilst the Australian 10-year government bond yield was unchanged at 3.97%.

The Australian dollar was stronger against most major currencies, rising 2.2% relative to the US Dollar, and by smaller margins relative to the Euro (1.4%), the Pound Sterling (0.2%) and the Japanese Yen (0.4%).  Partially reflecting expectations for rate cuts in the US, the US Dollar was generally weaker against the currencies of most primary trading partners.