We're already 3 months into the new financial year, so our Super Helpful Market Update team is back to get you up to speed with all the current happenings in the world of investments. Find out where we've been investing and how it can help your super balance over the long term.
Shannon:
David and Iby, it's been a busy quarter for the fund, especially in the investment space. What are the headlines members need to know?
David:
Well Shannon, it's been a strong quarter to start the financial year for members, and pleasingly the one-year return for our high growth option, that's been 15.62%. And that's where most of our members are invested. It's also been a busy period for the investment team, all focused on helping members grow their balances over the long term.
Shannon:
That’s great. Any exciting investments our members should know about?
David:
Yeah, we've had some really big investment wins over the last quarter. For me, one I'd like to highlight is a sizeable infrastructure investment sourced from our UK office. This is a data and technology business supporting growth in AI. And our UK team were even invited to Downing Street to meet the Prime Minister. That's a real endorsement of our position as a global investor.
Shannon:
Wow, the Prime Minister, that's quite the win. So, it's really great to hear about where our members' money is being invested. But Iby, over to you. Let's talk a little bit about returns. Why do we always talk about long term returns?
Iby:
It's a great question, Shannon, and it's one members ask a lot. So short term numbers are important to keep an eye on, but for most members, super is a very long-term investment. Over that long term is where the members will benefit from the magic that is compound interest.
David:
Yeah, that's right Iby. I think it was Albert Einstein who said compound interest is the eighth wonder of the world. And our 10-year numbers really reinforce that.
So Aware members in the High Growth option, they've had a return of 9.02% per annum over the last 10-year period. For our members in retirement, in the Conservative Balanced option, that's been an average annual return of 6.81% for that same 10-year period.
Shannon:
So David, speaking about this long term outlook, how does Aware manage its investment portfolio?
David:
Well Shannon, we have a really diversified portfolio of investments, which means we have money invested in different sectors, different countries and different securities. This helps us smooth out the bumps in the road, which are an inevitable part of investing. This diversified approach, it's one of the great benefits of being with one of Australia's largest superannuation funds.
Another focus for us is having global diversification. And we actually opened our UK office about a year ago, so we could be closer to those larger overseas markets and identify more investments for our members.
Shannon:
So how does investing globally help our members?
David:
Well, it gives us access to a wider range of investments outside of the relatively small Australian market. And that means a stronger, more diversified portfolio for our members.
Iby:
It sure does, David. I'd just like to talk a little bit about the bumps in the road that you mentioned earlier, or what we like to call market volatility. No one likes to see their super balance fall, but it does happen, and it's part of the ride that is investing. The other side of the coin though, is that quality assets will continue to grow over the long term. So, it's a little bit of short-term pain for the long-term gain.
The ups and the downs shouldn't be keeping you up at night. We're all different though, and we can all handle different levels of ups and downs at different stages of life and at different times. Our advice team can help review your options to make sure that you're in an investment that you're most comfortable with.
Shannon:
Thanks, Iby. That's always super helpful.
So David, before we wrap up, tell me a little bit more about our investments in AI, and why is this a good thing for my super?
David:
Well like I mentioned earlier, we don't put all our eggs in one basket, but the rise of AI has created some really interesting investment opportunities for global investors like us, and obviously in companies benefiting from its growth.
So, we're invested in those mega cap tech stocks you would have heard of, Facebook, Apple, Amazon and Nvidia, which makes the specialist chips that AI needs. But as well as that, we're investing in infrastructure opportunities, such as euNetworks I mentioned before, which owns and operates the fibre networks. It's really essential for data transmission and high-speed connectivity between companies, cities, and data centres across Europe. All those things that help our day-to-day lives, but really mostly go unseen.
Shannon:
So AI might not be taking my job just yet, but it is making my super balance grow?
David:
Well, it is at the moment Shannon.
Shannon:
Thanks for keeping us in the loop, guys. And don't forget to check out aware.com.au for more super helpful info on managing your super.
It was another positive quarter for Aware Super members. Our Future Saver High Growth option returned 15.62% for the year to 30 September 2024.^
Your super is a part of Aware Super’s $180 billion portfolio, invested across a wide range of commodities including shares, property, infrastructure and private equity, as well as bonds and cash. Our diversified portfolio can help smooth out market ups and downs to keep your super on track to grow over the long term.
^FutureSaver High Growth, Balanced and Conservative Balanced returns. These results are based on transactional unit prices and are the returns experienced by members at 30 September 2024. The timing of some valuations may mean that there is some variation in the returns as reported to external research house agencies. Investment returns are calculated after allowing for tax on investment income, investment fees and costs, and transaction costs, but before the deduction of administration fees. Returns reported by Aware Super as at 30 September, are available on our website. Past performance is not an indicator of future performance.
If you’ve had a few different jobs over the years, chances are you have more than one super account and you could be paying multiple sets of fees.[C1]
Join our experienced superannuation experts as they break down super into easy-to-understand topics through live webinars and seminars.
Worried about the admin and time running a Self Managed Super Fund? Compare the differences with a normal super fund.
From 1 July 2024, the amount of super you receive from your employer increased from 11% to 11.5%.
Stage 3 tax cuts were introduced on 1 July 2024, providing an income tax reduction for most Australians. With tax savings in your pocket, consider adding it to your super – plus you’ll also save on tax.
You can now add more to your super for both before-tax and after-tax contributions.
Now you can contribute up to $30,000 at the lower tax rate of 15% for before-tax contributions, up from $27,500, allowing you to add more to your super account.1
The non-concessional contributions cap (also known as the after-tax contributions cap) has increased from $110,000 per year to $120,000. This change will also affect the bring forward rule, which will increase up to $360,000 depending on your super balance.
Scroll table horizontally on mobile
| Super balance (at 30 June 2024) | Bring-forward rule non-concessional contributions caps | Bring-forward rule timeframe |
|---|---|---|
| Less than $1.66m | $360,000 | 3 years |
| $1.66m - $1.78m | $240,000 | 2 years |
| $1.78m - $1.9m | $120,000 | 1 year |
| More than $1.9m | 0 | N/A |
The Government co-contribution income thresholds increased on 1 July, 2024:
Scroll table horizontally on mobile
| Year | Maximum entitlement | Lower income threshold | Higher income threshold |
|---|---|---|---|
| 2024–25 | $500 | $45,400 | $60,400 |
| 2023–24 | $500 | $43,445 | $58,445 |
With the changes, if your total income is below $45,400 and you contribute $1,000 of after-tax or non-concessional contributions, you’ll receive a co-contribution from the Government of $500.2
If your total income is greater than the higher threshold, you won't receive any co-contribution. If your total income is between the two thresholds, your maximum entitlement will reduce progressively as your income rises.
