Investment update with John Pearce – February 2024

Chief Investment Officer John Pearce talks about what’s behind the recent market rally, and the performance of our investment options.

Since the lows we saw in October last year, the Australian and US share markets have rallied. In his latest investment update, Chief Investment Officer John Pearce gives an overview of what’s behind this market strength, how our investment options are performing, and asks: are we on solid ground?

Key points in John Pearce’s video:

  • The rollercoaster ride of the market continues. This financial year has been a story of two halves—after a weak start, it had a strong recovery.
  • The market is confident that inflation is trending downwards towards the 3% target central banks are looking to achieve without the need for central banks to tighten to the point of recession.
  • Strong economies and low inflation tend to be good for company profits and for share prices.
  • Our Balanced investment option—our default and largest option—had a slow start to FY23-24 but has since recovered.
  • Our Listed Property investment option has performed strongly. Listed property is very sensitive to interest rates, so the prospect of rates being on hold has really lifted that sector.
  • Global Environmental Opportunities was our weakest performer. We believe the thematics underpinning this option are still strong. For example, decarbonisation is here to stay but there have been some cyclical headwinds—including rising interest rates and financing costs, a slowdown in demand, and uncertainty around the upcoming US election.
  • The Australian Income investment option, an option that’s proving popular with retirees, has delivered a steady return.
  • There are a number of reasons why the market could be on solid ground. Inflation is heading in the right direction and the US Federal Reserve appears to have pivoted—and recent comments from Fed chair Jerome Powell suggest we may see rates cut this year.
  • While there’s a sense of optimism, there are still risks—geopolitical risks, the risk of an economic hard landing, or a reacceleration of inflation (which is the risk that is of greatest concern).
More like this

Watch the latest video

  • reading icon

    Read the transcript  

 

Stay up to speed on what’s happening in financial markets in 10 minutes! Listen to our monthly investment podcast series and hear directly from our investment team.


*Past performance isn’t an indicator of future performance.

This information is of a general nature and may include general advice—it doesn’t take into account your individual objectives, financial situation or needs. Our investment strategies won’t necessarily be appropriate for other investors. Before making any decision in relation to your UniSuper membership, you should consider your circumstances, the relevant PDS and TMD, and whether to consult a qualified financial adviser. For a copy of the PDS or TMD, call us on 1800 331 685 or visit unisuper.com.au/pds.

This information is current as at 7 February 2024. Holdings are as at 31 January 2024 and are subject to change without notice. Comments on the companies we invest in aren’t intended as recommendations of those companies for inclusion in personal portfolios. UniSuper’s portfolios have been designed to suit UniSuper, and may not be appropriate for others. The above material reflects our view at a point in time, having regard to factors specific to us and our overall investment objectives and strategies.

Prepared by UniSuper Management Pty Ltd (ABN 91 006 961 799, AFSL No. 235907) on behalf of UniSuper Limited (ABN 54 006 027 121) the trustee of UniSuper (ABN 91 385 943 850, AFSL No.492806) the fund.

 

X
Cookies help us improve your website experience.
By using our website, you agree to our use of cookies.
Confirm