Super star performer

16-Apr-2018

Members will be pleased to learn that VISSF has continued its strong investment performance over 2018. As financial markets ended the year on a strong note, our diversified options benefited from their exposure to growth assets such as Australian and global shares. 

For the year ending 31 January 2018, the All Growth option produced a 16.3% return for members, this was one of the best yearly returns over the past five years, while the Balanced and Conservative options delivered 12.9% and 7.1% respectively. Options with higher weightings towards growth assets were the strongest performers.

Year in review 

Financial markets began 2017 on the back foot amid doubts over Donald Trump’s ability to deliver on his election promises, uncertainty stemming from his proposed travel ban on citizens of seven, mostly Muslim nations, and renewed fears of a ‘hard’ Brexit. 

However, sentiment turned more positive due to increasing optimism over the global growth outlook, some encouraging comments on the US economy from US Federal Reserve (Fed) chair Janet Yellen and a series of better-than-expected global earnings results. 

The positive momentum we saw in the early part of the year continued because of strong earnings results, Emmanuel Macron’s convincing win over Marine Le Pen in France’s presidential election and a series of positive US and European data points. 

Financial markets ended the year on a strong note, thanks to yet another round of positive US earnings results, improving US, European and Chinese economic data and stronger commodity prices. Stocks benefited from news Congress had finally approved Trump’s much-anticipated tax plan, Shinzo Abe’s resounding election win in Japan and the European Central Bank’s decision to wind back its monthly bond purchases – a move seen by investors as a nod to the underlying strength of the region’s economy. 

VISSF continues to meet investment objectives and maximise returns relative to inflation, as measured by the Consumer Price Index (CPI), with all our diversified options significantly outperforming their CPI relative investment objectives across all periods to 31 January 2018.

See the table below for investment return details.

Year ended
31 January  2018
One year (%)  
3 year compound average
(%pa)
5 year compound average
(%pa)
7 year compound average
 (%pa)
10 year compound average
 (%pa)[1]
All Growth 16.3 9.8 11.6 9.7 6.1
Objective (CPI + 3.5%) 5.4 5.2 5.4 5.6 5.8
Outperformance +10.9 +4.6 +6.2 +4.1 +0.2
Balanced 12.9 7.9 9.7 8.6 6.1
Objective (CPI + 3.0%) 4.9 4.7 4.9 5.1 5.3
Outperformance +8.0 +3.2 +4.8 +3.5 +0.8
Conservative 7.1 5.0 6.2 6.4 5.7
Objective (CPI + 1.5%) 3.4 3.2 3.4 3.6 3.8
Outperformance +3.7 +1.8 +2.8 +2.8 +1.9
Cash 1.1 1.4 1.6 2.1 2.6
Objective (Bloomberg AusBond Index)[2] 1.1 1.4 1.6 2.1 2.7
Outperformance 0.0 0.0 0.0 0.0 -0.1
Inflation CPI 1.9 1.7 1.9 2.1 2.3


[1] The effect of the global financial crisis (GFC) in 2008/09 can still be seen in the 10 year compound returns. This highlights the extreme nature of the GFC.

[2] The Bloomberg Aus Bond Bank Bill Index returns are net of fees.

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