Investment Performance - Market overview to 30 September 2021

 

Investment Performance
Market overview as at 28 February 2022

February was a tough month for investment markets with international shares, global property and fixed income asset classes all experiencing negative returns.

Share market performance was mixed across the globe during February as geopolitical uncertainty from Russia’s invasion of the Ukraine, and continued pressure on inflation forced central banks to raise interest rates which negatively impacted international share markets and resulted in losses of 5.5% (unhedged in Australian dollars) for the month.

Global property markets were also down by 5.5% for the month and increases in bond yields led to negative returns from fixed income markets, with the Australian bond market returning -1.2%. Cash returns remain very low with the Reserve Bank of Australia (RBA) making no changes to interest rates.

The silver lining for the month was the resilience of the Australian share market which, due to its higher weighting in commodities, gained 2.1%. The positive performance was led by the energy sector which was up 8.6%.

Investors seek safe haven assets as Russia invades

With no major armed conflict in Europe since the end of World War II in 1945, global financial markets were unnerved in late February by Russia’s invasion of the Ukraine and the speed at which it occurred. This saw share markets fall as investors sought safe haven assets.

While western nations have limited themselves to indirect involvement in the war, they have collectively imposed strict sanctions on Russia for their aggression. These sanctions include export controls, banning trade financing, blocking technology exports, freezing assets and the removal of most Russian banks from the SWIFT global payment system. As a result of these sanctions, the Russian ruble has fallen 30% against the US dollar.

Summary

International share markets performed poorly over the month, with European markets shouldering most of the impact. It is difficult to know how long the Russia-Ukraine conflict will last, but history has shown that the impact of these types of conflicts on markets are usually short-lived and markets do recover.

The sanctions being imposed by the west are significant and are beginning to cripple the Russian economy, but Putin’s response will be critical to the length of the conflict. We all hope that an agreement can be reached by both parties, and in the meantime, we are monitoring market volatility and risks.

EISS Super

Performance History

1 mth (%) 3 mth (%) FYTD ** 1 yr % (pa) 3 yr % (pa) 5 yr % (pa) 7 yr % (pa) 10 yr % (pa)
*Please note prior to 18 November 2019 the EISS Super default MySuper investment option was the Conservative Balanced option
**FYTD means Financial Year to Date starting 1 July.

EISS Pension

Performance History

1 mth (%) 3 mth (%) FYTD * 1 yr % (pa) 3 yr % (pa) 5 yr % (pa) 7 yr % (pa) 10 yr % (pa)
*FYTD means Financial Year to Date starting 1 July.

Retirement Scheme

Performance History

1 mth (%) 3 mth (%) FYTD * 1 yr % (pa) 3 yr % (pa) 5 yr % (pa) 7 yr % (pa) 10 yr % (pa)
*FYTD means Financial Year to Date starting 1 July.