Riding the market roller coaster

Our Balanced option fared well with a return of 10.3% over the 12 months to 31 December 2023.* All UniSuper investment options achieved positive returns over this same period except the Global Environmental Opportunities (GEO) option, which returned -1.43% over the 12 months to 31 December 2023,* see more below on GEO and why it has been down.

Members can choose from 16 investment options, including pre-mixed and sector options. The pre-mixed options include a diverse range of asset classes; the allocation to each asset class depends on the risk profile and strategy of the option.

Our sector options are concentrated in one asset class or theme and tend to be less diversified, so market volatility can have a bigger impact on them. These options are intended to be combined together or with our pre-mixed options to build a more diverse portfolio.

What does Global Environmental Opportunities invest in?

GEO is a very high risk option, its strategy is to invest in companies which are addressing environmental issues and opportunities.¹ Unlike a traditional shares style option, its investment universe is more restricted which makes it more exposed to volatility. Two examples of GEO investments are renewable energy companies and electric vehicle (EV) manufacturers.

You can read more about GEO’s investment criteria here.

Why the volatility in GEO?

As our Chief Investment Officer, John Pearce, noted in his recent video, the thematics underpinning this option are still strong (e.g., decarbonisation is here to stay), but the types of companies that GEO invests in have experienced some headwinds including high interest rates, a lull in demand, and uncertainty around the speed of the energy transition particularly given the upcoming US election.

Listen to John Pearce’s investment update here.

While we expect the energy transition to be a long term theme, there will be bumps along the way. GEO in particular is designed as a long term strategy. It’s important to keep this in perspective, consider the risks when choosing investment options, and seek advice. If you’re a UniSuper member, you have access to UniSuper Advice, see here for more information about the services we offer.