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Strong long-term performance, despite difficult conditions

Investing in unprecedented and challenging market conditions

Although markets began 2020 with a sense of optimism, they were soon disrupted. The devastating Australian bushfires closed down a number of industries, the global coronavirus pandemic forced many economies to hit ‘pause’ in order to dampen its spread, and geopolitical tensions between the USA and China simmered throughout. 

Despite volatile and uncertain conditions, we delivered positive one-year returns for members in our Capital Stable, Moderate and Balanced diversified options.   

This places us above or in-line with median performance for our Moderate and Balanced options against peers for the year to 30 June 2020 as well as longer time horizons (3 and 5-year periods)1.  

Importantly, over the longer-term periods of 3, 5, 7 and 10-year periods, we continue to deliver strong, positive returns across all diversified options.  

Putting your retirement outcomes first  

As a market leader in the field of retirement investing, we are one of the largest and longest-standing providers of dedicated retirement investments in Australia, with a strong track record of delivering excellent outcomes for our members. At Aware Super, we understand the financial needs of retirees and pre-retirees and that’s why we invest our retired members’ money differently.  

The recent market volatility has put the spotlight back on the need to manage our investment options in ways that cushion the impact of large market falls for our members who are nearing, or in, retirement.  

We tailor our investments to have a greater focus on risk management. 

Our investment strategies aim to balance strong long-term returns and are designed to fall less as markets fall.  

Importantly, this investment approach has delivered on what it was meant to do during the recent period of market volatility – helping to cushion the impact of market falls and, in turn, helping retirement outcomes for our members . 

We continue to focus on delivering your retirement goals 

We expect market volatility will remain heightened as markets grapple with the risk of second waves of COVID-19 infections, rising geopolitical tensions with China and the implications of the US election. In response, we continue to focus on risk management and on achieving sustainable long-term returns for the benefit of our members. 

In addition to the specific risk-managed strategies above, other ways we minimise risk include: 

  1. Diversifying our investments.This means spreading money in an investment option across a range of quality investments. Because the risk is spread, the impact of market movements on these options is lower, given different investments react differently in times of volatility.
  2. Taking on risk we are confident will be rewarded.
    Our investments in infrastructure and property, for example, focus on assets that emphasise sustainable long-term cash flows. These investments remain focused on delivering strong long-term returns to members despite short-term market events.

Resilience during COVID-19 market volatility2

The Flexible Income Plan’s Balanced and Moderate investment options are diversified options, meaning they invest across a range of asset classes, each with its own investment strategies. Our liquid alternative strategies in these options are designed to perform well through periods of significant market volatility.  

This asset class returned 28% at the peak of the COVID-19 market volatility3. For the same period, our equity strategies that are also orientated to have a more defensive focus, outperformed their benchmarks by 1.0% and 3.5% for Australian and International equities respectively.  

When Australian equity markets fell by over 20% in March 2020, that same month, the Balanced option only fell by 6%, and the Moderate option only fell by 3%. Having our retirement-specific strategies in place helped to moderate the impact from the large swings in markets.  

This also meant we were able to deliver positive returns for the year to 30 June 2020 for both the Balanced and Moderate options. This is a great outcome for our members, especially those who are near, or in, retirement, as large drawdowns experienced during this stage of your superannuation journey can be difficult to recover from.  

Members can also take comfort that this is a strong result compared to other pension funds. For the month and quarter to 31 March 2020, both the Balanced and Moderate options were top 10 performers4. Despite a strong equities rebound, which favoured those funds with a higher allocation to growth assets, these options still returned well above median returns for the year to end 30 June 20201.

We focus on protecting your retirement savings by aligning our investment approach with your goals. This gives you greater peace of mind and means you can draw a stable income through retirement, while still seeking the growth that is needed to protect your savings from the effects of inflation.  

For more information on our investment approach, visit 

1 SuperRatings Accumulation Fund Crediting Rate Survey and SuperRatings Pension Fund Crediting Rate Survey June 2020. 
2 Flexible Income Plan performance used for the case study. 
3 Peak COVID-19 volatility period of 20 February 2020 to 23 March 2020. 
4 SuperRatings Pension Fund Crediting Rate Survey, Capital Stable (20-40) universe and Conservative Balanced (41-59) universe, March 2020.

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