Investment update to 31 May 2024

Published 25 June 2024

Global share markets performed strongly in May 2024, rebounding from the previous month’s downturn. This rise was fuelled by the technology sector and increasing investor confidence in anticipation of interest rate cuts later this year.

Share market gains over the month resulted in strong returns for many of our investment options. Examples of returns for our default investments options are¹:

• Accumulation accounts: MySuper returned 9.45% for 1-year ended 31 May 2024.
• Pension accounts: Balanced returned 12.87% and Conservative Balanced returned 10.23% for 1-year ended 31 May 2024.

While most of our investment options performed well in May 2024, the exception was Property, where unlisted property assets tend to be more sensitive to higher interest rates.

View the returns of all our investment options

Market summary

In May 2024, investor confidence in the global economy significantly influenced market performance, boosting equity markets. Anticipation of central banks reducing interest rates led to declining bond yields. The MSCI World (hedged to AUD) Index rose by 3.9%, while the MSCI Emerging Markets (Unhedged) Index fell by 1.8%.

In the US, the S&P 500 Index gained 4.9% for the month, driven by robust corporate earnings, especially in the information technology sector due to demand for artificial intelligence-related technology. The narrative of a soft economic landing resurfaced as the Federal Reserve signalled the potential for interest rate cuts later in 2024. Market expectations shifted to anticipate a single US rate cut in December 2024.

In Europe, the MSCI AC Europe Index increased by 2.5%, led by the real estate and utilities sectors, which benefited from investor anticipation of a rate cut at the European Central Bank (ECB) meeting in June 2024. The financial sector also performed well, while energy and consumer discretionary sectors were the weakest. UK equities also saw gains, driven by strong performance in the financials and industrials sectors.

In China, the MSCI China Index increased by 2.5% over the month. Policymakers took steps to stabilize the economy and particularly the housing market, amid slow improvements in economic data. However, the US announcement of new targeted tariffs on specific Chinese imports including electric vehicles dampened sentiment.

In Australia, the ASX300 stock market index posted a modest gain of 0.9% for the month, reflecting mixed sector performance. Information technology led the gains, delivering a robust 4.5%, followed by utilities with a 3.4% return. In contrast, the telecommunications sector underperformed, declining by 2.8%. The Reserve Bank of Australia maintained the cash rate at 4.35% in May 2024, again signalling caution that inflation remained a threat.

The Australian 10-year bond yield remained flat, decreasing by 0.01% to 4.41% for the month. Meanwhile, the US 10-year government bond yields decreased by 0.19% to 4.49%. The divergence over the month in part linked to differing inflation trends, with Australian inflation exceeding expectations.

The Australian Dollar appreciated against most major currencies, rising 0.9% against the Euro, 0.7% against the Pound Sterling, and 2.3% against the Japanese Yen. The Australian Dollar weakened by 1.4% against the New Zealand Dollar.

Brighter together

On 31 May 2024, Brighter Super streamlined all its investment options into a single set of options for all members. We have kept all our members informed of the changes in recent months.

To create a single set of options, we evaluated and compared similar options for Brighter Super and Optimiser accounts for performance, fee structure and management.

As a result of this review, we determined that it was in members’ best interests to close selected investment options. On 31 May 2024, members invested in the closing options were switched to similar, continuing investment options with a history of better performance.

We have also made changes to administration fees and introduced a consistent cap, so that no member will pay more than $900 in administration fees per financial year.

View the latest returns for all options in our new single set of investment options.

You can also learn more about the changes and watch a short video featuring Brighter Super CEO, Kate Farrar and retirement advocate, David ‘Kochie’ Koch.