FY22 super returns for MySuper Westpac Group Plan members

Article

An unprecedented number of global events has seen investment markets experience sharp periods of volatility during the year ended 30 June 2022. And in what has been a very different financial year compared to last year, returns for BT Super for Life – Westpac Group Plan members are much lower this year.

Market volatility has been the key theme for share, property, and bond markets during the 2022 financial year (FY22) due to higher inflation, global supply chain issues, interest rate increases, COVID-19-induced lockdowns in China and local flooding. In addition, we have seen war come to Europe’s doorstep with the Russian invasion of Ukraine.

Share markets have fallen across the globe. International developed market shares returned -6.52% for the year ending 30 June 2022 with emerging market shares the hardest hit, returning -18.43%, while the Australian market returned -6.78% over the same period. Both global and Australian listed property were also lower, returning -10.49% and -11.22% respectively for the year ending 30 June 2022.

Economic impacts from interest rate rises and increasing inflationary pressures have impacted the normally ‘safe’ bond markets with international bonds returning -9.33% and Australian bonds -10.51% over the year to 30 June 2022.

Performance returns by asset class as at 30 June 2022


Growth assets


1 year


3 years (p.a.)


5 years (p.a.)


7 years
(p.a.)


10 years (p.a.)

Australian shares

-6.78%

3.44%

6.90%

6.98%

9.24%

International shares 

-6.52%

7.83%

10.12%

9.32%

14.11%

Emerging market shares

-18.43%

1.25%

4.44%

4.43%

7.26%

Australian listed property

-11.22%

-1.95%

4.96%

5.94%

9.50%

Global listed property

-10.49%

-1.36%

1.93%

3.39%

6.57%


Defensive assets


1 year


3 years (p.a.)


5 years (p.a.)


7 years (p.a.)


10 years 
(p.a.)

Australian bonds

-10.51%

-2.58%

0.87%

1.64%

2.58%

International bonds

-9.33%

-1.63%

0.78%

1.92%

3.12%

Cash

0.10%

0.33%

0.95%

1.26%

1.73%

Source: Factset and BTIS. Australian shares - S&P/ASX 300 Accumulation Index, International shares - (unhedged) MSCI World ex Australia Net Return in AUD, Emerging market shares - MSCI Emerging Markets EM Net Total Return Index (AUD), Australian property - S&P/ASX 300 A-REIT Accumulation Index, Global property - FTSE EPRA/NAREIT Developed Hedged in AUD Net TRI,   Australian fixed interest - Bloomberg AusBond Composite 0+ Yr Index, International fixed interest - Bloomberg Barclays Global-Aggregate Total Return Index Value Hedged AUD, Cash - Bloomberg AusBond Bank Bill Index. As at 30 June 2022. Past performance is not a reliable indication of future performance.
 

Westpac Group Plan MySuper Lifestage investment options

Many Westpac Group Plan members are invested in our Westpac Group Plan MySuper Lifestage investment options. These options are designed to help you adapt as you move through different stages of your life – to help target higher returns when you’re younger and reduce your risk as you get closer to retirement.

Members born in the 1970s, 80s, 90s and 2000s

Those born in the 1970s to 2000s have around 90%^ of their super invested in growth assets (such as shares and property) and as such these members’ super fund returns have fallen in FY22 mainly due to declines in share markets. This is in stark contrast to last year’s double-digit returns.

While the one-year performance has fallen, these members have seen positive performance over the 2, 3, 5, 7 and 10-year periods.

Members born in the 1940s, 1950s and 1960s

Lifestage investment options for members in these age groups are designed to reduce risk as they approach retirement. These options gradually reduce members’ exposures to growth assets, such as shares and property, as their retirement nears. For example, the 1940s and 1950s funds have between 36%^ and 44%^ invested in growth assets, while the 1960s fund has around 62%^ invested in growth assets.

Typically, investment options with a higher proportion invested in defensive assets (such as cash, bonds) would help cushion share market falls, however, market volatility this financial year has impacted all asset classes, including traditionally more ‘defensive’ bond markets, which have been particularly impacted by higher inflation. With interest rates moving upwards from historical low levels of almost zero per cent, for the first time in over 30 years, we have seen negative returns across bond markets over the last 12 months.

This is because when interest rates rise, bond prices fall. To understand this more, consider two bond purchases, one bought in the current, higher interest rate environment and the other, a year ago, when interest rates were lower. The bond that was bought at the low interest rate environment would now be less attractive because an investor can purchase a bond with higher rates today.

As a result, the one-year returns to 30 June 2022 have fallen for our 1940s, 1950s and 1960s MySuper Lifestage members. This is very different to what members received last financial year, with members in the 1940s, 1950s and 1960s investment options receiving positive returns of 8.69%, 10.63% and 17.28% respectively.

Over the longer-term, these members have also continued to see positive performance.

Members who've personalised their super investments

Some Westpac Group Plan members are invested in either ‘heritage’ investment options or have chosen to personalise their super by selecting their own mix from the broader investment menu.

These members would see a range of returns for the 12 months to 30 June 2022, depending on how they’re invested. Over the year to 30 June 2022, most asset classes had negative returns, meaning it is likely most investment options had lower returns compared to previous years. As always, over the longer term, investment options with higher allocations to growth assets are likely to have higher returns than those with higher allocations to defensive assets.

How do I find out more?

You can find all the detail about how our investment options have performed over the short and long term to 30 June 2022 on the Prices and Performance page on our website or sign in to your super account.   

Annual statements will be available online from August 2022. For more information see our Statement dates and FAQs page.

The outlook for super funds

Super is typically considered a long-term investment, and recent events demonstrate exactly why members should stay calm, avoid reacting to short-term noise, and take a long-term view.

In fact, since the introduction of compulsory superannuation in 1992, the median growth fund has returned 8% per annum. Even looking at the past 20 years, which now includes three major share market downturns – the ‘tech wreck’ in 2002-2003, the GFC in 2007-2009 and COVID-19 in 2020 – the median growth fund has returned 7% per annum~.

Despite COVID-19 hitting markets in 2020 and the recent market correction, $1,000 invested 10 years ago in the Westpac Group Plan – BT MySuper 1970s Lifestage investment option would be worth $2,209 at the end of June 2022 – that’s a return of 8.25% per annum for the last 10 years.

Corrin Collocott, BT’s Chief Investment Officer, explains, “Over the past financial year, we’ve seen a perfect storm brewing of high inflation, rising interest rates, geo-political tensions, global supply chain issues and locally, the devastation caused by floods and trade frictions with China.

“The bond market sell-off this financial year is one of the largest declines we’ve seen in decades. We are cautiously optimistic that the interest rate increases have been priced in by markets and that we’ll see bond markets return to more normal levels next year”, says Corrin.

Generally, over the long term, shares and property continue to provide an opportunity to build long-term wealth, while cash and bonds provide some cushioning when share markets are volatile. Maintaining good diversification when investing in super leaves you less exposed to a single economic or market event. And by avoiding panic, and staying invested for the long term, you’ll potentially make the most of rebounding markets when they happen.

^Asset allocation as at 30 June 2022.
~ Chant West media release 20 June 2022.

Related content

After last financial year’s strong super fund returns, there may have been an expectation that this year’s returns will be similar. As we near the end of this financial year, BT Chief Investment Officer Corrin Collocott looks at why they won’t and what this means for super funds like the Westpac Group Plan.

Sign in to your account to read more about your super fund performance. 

Things you should know

The information is prepared by BT Funds Management Limited ABN 63 002 916 458 (BTFM) the trustee of the following: BT Super for Life, BT Super for Life Westpac Group Plan and BT Super part of the superannuation fund Retirement Wrap ABN 39 827 542 991. Information is current as at 12 July 2022.

This information has been prepared as general advice only and does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs before acting on it. Read the Product Disclosure Statement (PDS) to see if these products are right for you by visiting bt.com.au. The issuers of the products named in this article can be found in the relevant disclosure documents. Read the disclosure documents for your selected product before deciding. Target Market Determinations for our products can be found here. All examples are illustrative only. Your portfolio value and performance will depend on the investment options you have selected and the time over which they are invested. 

Investment returns are historical. Investment returns can move up or down and past performance is not necessarily indicative of future performance. Future performance is not guaranteed. Performance differences between the investment options and respective underlying funds exist due to factors such as valuation timing differences, differences in fees and charges, distributions (as cash may be retained for liquidity purposes) and higher cash holdings. More information on the asset allocation and risk exposures of each fund can be found in the PDS.

BTFM is a member of the Westpac Banking Corporation ABN 33 007 457 141 (Westpac) group of companies. An investment in these products is not an investment in, deposit with or any other liability of Westpac, any division of Westpac or any other company in the Westpac Group. Westpac and its related entities do not stand behind or otherwise guarantee the capital value or investment performance of the products or any related assets of the products.