Investment update to 31 October 2024

2 December 2024

Global share markets were down slightly in October 2024 from the previous month. This was due to uncertainties ahead of the US election, which also impacted Europe, along with China’s ongoing economic challenges.

Despite these conditions, Brighter Super delivered strong and competitive returns during the month, positioning us favourably against our peers.

As we approach the end of 2024, we're pleased to report that our MySuper option has achieved top quartile returns in SuperRatings' SR50 MySuper Index for both 1-year and 3-year periods to 31 October 2024. Also, our Balanced and Growth options continue to continue to deliver some of the industry’s highest returns, as shown in the SuperRatings’ latest survey¹.

The hard work following last year's merger to streamline our investment options and transform our processes are demonstrating tangible results.

Strong share market performance has significantly contributed to our success, complemented by solid returns from most asset classes in our diversified portfolio. While the property sector has experienced more subdued performance, it remains a critical component of our long-term investment approach, providing protection against share market volatility and enhancing portfolio diversification.

Overview of returns for diversified options

Below are the returns for Brighter Super’s diversified investment options for the period ending 31 October 2024².

Growth and Balanced options continue their strong performance

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

Our Growth and Balanced options also delivered top quartile in their respective SR50 index for 1 and 3 years to 31 October 2024, for both Accumulation and Pension accounts.

Brighter Super’s default MySuper option delivered top quartile returns in the SR50 MySuper Index for 1 year (ranked 12th) and 3 years (ranked 4th) ended 31 October 2024.

Market summary

Share markets were marginally weaker in October 2024. The MSCI World ex-Australia Index (Hedged) dropped slightly, returning -0.9%. In the US, economic data was better than expected, which reduced expectations for the magnitude of rate cuts. Ahead of the US election, uncertainty surrounding the outcome may also have contributed to weaker equity market returns. 

US shares were in line with other developed markets, with the S&P 500 also returning -0.9%. Volatility on the final day of the month resulted in generally flat returns. Some large technology companies missed their earnings forecasts, which alongside election uncertainty, affected investor confidence. Otherwise, earnings were decent and reflected the ongoing strength of the US economy.

In Asia, Chinese shares were weaker (-5.6%), having performed well in September. Investor confidence seemed to drop despite the significant government stimulus measures announced earlier. Concerns about the property sector and economic growth continued to weigh on market performance.

The MSCI Europe Index underperformed other developed markets (-3.3%), this may have been linked to concerns about the US election and economic outlook for Eurozone countries. With inflation having moderated to levels close to 2%, the European Central Bank reduced interest rates by 0.25% during October. 

The Australian share market was also weaker for the month (returning -1.3%), underperforming other developed markets.  The Financials sector was strongest performer, returning 3.3%, whilst Utilities and Consumer Staples were among the weakest sectors. After the month ended, the Reserve Bank of Australia (RBA) decided to keep interest rates unchanged, noting that inflation had fallen significantly but was conscious of the impending removal of temporary cost of living measures that may result in inflation pressure in 2025.

Global bond returns were also weaker in October, returning -1.5% (hedged), whilst Australian bond returns were also weaker (-1.9%). Bond yields were much higher in the US, with the 10-year yield rising to 4.28%. The rise in yields likely reflected a range of positive economic data over the month, reducing expectations for the magnitude of policy easing. The Australian 10-year government bond yield rose to 4.51%.

The Australian dollar weakened against the US dollar in October, falling -5.6%. Rising US bond yields and expectations for the outcome of the US election likely supported US Dollar strength. Expectations for interest rate cuts in the US were dampened somewhat over the month, increasing the yield differential against other geographies. The Australian dollar was also marginally weaker relative to the Euro and British Pound.