Investment update to 31 March 2024

Information for members with an Optimiser account

Published 15 May 2024

Share markets continued their recent upward trend in March 2024, driven by a resilient US economy, strong gains in Japan and enthusiasm for companies expected to benefit from Artificial Intelligence technologies. The Australian share market was also positive, led by Real Estate and Energy sectors.

Expectations of interest rate cuts by the major central banks also contributed positively to market gains, although the anticipated timing and size of cuts has moderated since the start of the year.

Asset classes with the strongest performance in March 2024 were Australian Listed Property (9.6%). Global Listed Property (3.8%), International Shares (3.4%) and Australian shares (3.3%).

Brighter Super’s ready-made Multi-Manager options continue to deliver strong returns. All four options were positioned in the top quartile for their categories in the SuperRatings Fund Crediting Rate Survey March 2024 for 1-and 5-year periods (Accumulation and Pension surveys)¹.

We are pleased to report that, once again, our Multi-Manager High Growth Fund and Multi-Manager Growth Fund have been ranked by SuperRatings as the highest performing options in their categories for the 5-year period ended 31 March 2024.

The table below shows returns for our ready-made options over the 1- and 5-year periods ended 31 March 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

Global equity markets showed broad strength across most regions during March 2024. Resilient economic growth in the US and early signs of some improvement in the economic outlook across other regions added support to investor expectations of the corporate earnings outlook.

In the US, the market maintained its upward momentum, with the S&P 500 registering a 3.2% rise in March 2024. This rise went beyond the usual tech giants, with Energy, Financials, and Utilities sectors outperforming the Technology sector. The US Federal Reserve held policy rates steady at the March 2024 meeting, signalling a cautious approach towards future policy adjustments amidst a backdrop of solid growth and persistent inflationary pressures.

In Europe, the MSCI All Country Europe index climbed by 3.6% during the month. The UK also saw gains, supported by sectors expected to benefit from anticipated Bank of England policy rate reductions.

In Asia, Taiwanese stocks led the market, with a 9.3% increase in March 2024, spurred by Artificial Intelligence linked sentiment. For the first time in its history, Japan's Nikkei 225 index crossed the 40,000-point threshold, with investor sentiment towards the Japanese market having improved materially in the last 12 months. The Bank of Japan raised interest rates for the first time in nearly two decades, moving away from its long-standing negative interest rate policy.

Emerging Market equities posted positive returns, with the MSCI Emerging Market index rising by 2.3% in March 2024. Whilst Chinese equities were positive for the month, market scepticism remains over the outlook for China’s growth, given ongoing challenges linked to property market stress and weak consumer confidence.

The Australian equity market was also positive, with the ASX 300 up by 3.3% in March 2024. The Real Estate and Energy sectors were strongest. The Reserve Bank of Australia has retained a neutral policy outlook and has signalled a cautious path to future rate reductions.

In the bond market, expectations of a forthcoming rate cut cycle contributed to a drop in long-term bond yields over the month. The Australian Government 10-Year Bond Yield fell by 17 bps to 3.97%, while the US Government 10-Year Bond Yield remained relatively steady at 4.20%.

The Australian dollar strengthened during March 2024 against major currencies, appreciating against the Euro (+0.4%), Japanese Yen (+1.3%), and New Zealand Dollar (+2.1%).