Investment update to 31 July 2024

4 September 2024

Brighter Super’s investment options achieved strong returns in July 2024, with a slight increase on the previous month’s returns for all options. This was a good achievement considering the moderately positive month seen in global financial markets.

Examples of returns for the year ended 31 July 2024 include¹:

• For Accumulation accounts: Growth returned 12.76%, Balanced returned 11.36% and MySuper returned 9.87%.
• For Pension accounts: Growth returned 14.29%, Balanced returned 12.71% and Conservative Balance returned 10.61%.

High SuperRatings rankings

Brighter Super’s options achieved high rankings in SuperRatings’ July 2024 Fund Crediting Rate Survey, which is used to benchmark top-performing options across the Australian superannuation industry².

Most of our options were ranked in the top ten for 5- and 7-years ended 31 July 2024, and many were ranked in the top five. Our number one rankings were³:

• Growth and International Shares (Accumulation and Pension) were both ranked as the highest-performing options in their categories for 5- and 7-years ended 31 July 2024.
• Balanced and Conservative Balanced (Accumulation and Pension) were ranked as the highest-performing options in their categories for 7-years ended 31 July 2024.

Market summary

Share market returns were moderately positive worldwide for July 2024. Share markets appeared to have a mixed response to a range of softer US economic data over the month, with weaker US labour market data and lower than expected US inflation supporting investor expectations for rate cuts.

In the US, the S&P 500 share market index registered a 1.2% rise for the month. US economic activity remains relatively resilient.

In Europe, business activity and share market returns were slightly weaker than expected. Uncertainties linked to the French election also negatively impacted investor sentiment over the month. In The UK, incoming economic data was stronger than expected, which supported growing expectations for improved economic momentum. The Labour party had an overwhelming victory in the UK elections, though this was a widely anticipated result.

In Asia, share markets in China, Taiwan and Japan all delivered small negative returns. Chinese equity performance continues to be impacted by concerns about the real estate sector and risks to the broader economy. Returns for Japanese equities were likely impacted offshore investor selling linked to the strengthening Japanese Yen following an interest rate hike from the Bank of Japan.

The Australian equity market outperformed other Developed Markets, with the ASX 300 rising by 4.1% for the month. The Consumer Discretionary sector (non-essential goods and services) was the standout, returning 9%. Utilities, Energy and Materials were the only sectors to deliver a negative return.

Consumer Price Index data was released in July 2024, showing that Australian inflation rose 3.8% to the 12 months to June 2024. Inflation is persisting above the Reserve Bank of Australia’s target, and Housing and Health costs remain key contributors to inflationary pressures.

Overseas bonds returned 1.9% (hedged into AUD), as investor expectations for near term interest rate cuts increased over the month. The US 10-year government bond yield declined 32 basis points to 4.05%, while the Australian 10-year government bond yield declined 19 basis points to 4.12%.

The Australian dollar was generally weaker against the currencies of major trading partners, depreciating 2.2% against the US dollar, and 3.2% against the Euro. Returns relative to the Japanese Yen were particularly weak (-8.6%), though the Japanese Yen did strengthen against most major currencies.