Market Commentary as at 6 March 2009

Key points

  • Continued uncertainty in markets.
  • Is Australia in recession?
  • Australia in better shape than most.

Markets over January and February

Australian and overseas equities lost ground over January and February as investors continued to be concerned over the prospect of a deepening global recession. Listed property securities saw a massive sell-off due to profit downgrades and refinancing concerns. Domestic bonds continued to rally.

Has Australia entered a recession?

All the latest economic data suggests that we have (although not officially), however it is commonly accepted that Australia is better placed than most, although there could be more bad news to come:

  • Unemployment is likely to continue to rise in coming months and some forecasts have the figure at 7% by year end and 9% in 2010.
  • Housing prices are expected to fall further in the face of rising unemployment.
  • Company profits are also likely to fall further, as expected in a recession.
  • It is expected that there will be further falls in cash rates, despite the Reserve Bank leaving rates on hold at the March meeting.

Why is Australia in better shape than most?

  • In contrast with the US, Australia has a shortage of housing and therefore prices are not likely to slump to the same extent.
  • Australian banks are in relatively good shape.
  • The reducing A$ should provide a boost to exporters and local businesses that compete in import industries.
  • The Government and RBA in recognising the threat have undertaken stimulus earlier than in past recessions and they still have room to move with cash rates still higher than overseas.

Investment performance year-to-date

Tasplan sets monthly interim crediting rates for each investment option, based on actual performance in that month.

Interim rates will apply to members who have their benefit paid, or who switch investment options, during the year.

It takes 3-4 weeks after the end of each month to confirm interim crediting rates, due to the time involved in receiving and analysing reports from each of our investment managers.

Monthly investment performance for the 2008/2009 financial year is listed in the table below.

Tasplan Super

Equities
Option
Longer Term
Growth Option
Balanced
Option
Short Term
Defensive Option
Cash
Option
Monthly figures
July 2008
-2.57%
-1.76%
-1.06%
-0.04%
0.53%
August 2008
3.79%
3.22%
2.51%
1.70%
0.59%
September 2008
-7.54%
-6.12%
-4.25%
-1.90%
0.52%
October 2008
-9.46%
-8.24%
-5.65%
-3.06%
0.52%
November 2008
-4.54%
-3.58%
-2.18%
-0.31%
0.45%
December 2008
-0.38%
-0.55%
-0.20%
0.39%
0.39%
January 2009
-3.46%
-2.58%
-1.60%
-0.83%
0.34%
Year-to-date figures
July 2008 – January 2009
-22.3%
-18.4%
-12.0%
-4.1%
3.4%

Taspension

Pension Option Returns for the Period (pre tax, post fees)

Equities
Option
Longer Term
Growth Option
Balanced
Option
Short Term
Defensive Option
Cash
Option
Monthly figures
July 2008
-2.71%
-1.86%
-1.10%
0.02%
0.62%
August 2008
4.13%
3.54%
2.78%
1.92%
0.69%
September 2008
-8.14%
-6.69%
-4.65%
-2.08%
0.62%
October 2008
-10.42%
-9.07%
-6.22%
-3.41%
0.61%
November 2008
-4.93%
-3.92%
-2.36%
-0.29%
0.53%
December 2008
-0.41%
-0.60%
-0.19%
0.47%
0.46%
January 2009
-3.72%
-2.78%
-1.71%
-0.89%
0.40%
Year-to-date figures
July 2008 – January 2009
-23.9%
-19.9%
-12.9%
-4.3%
4.0%

Tasplan's financial year-to-date returns are detailed in the following table and graphed below.

These figures reflect the investment returns earned by the Plan's assets, year-to-date, during this financial year. (Note that there may be a small variance between the sum of the monthly rates and the year-to-date figure due to the impact of compound interest on monthly returns. Final rates for the year will be declared in August.)

Returns – Financial Year to 1 January 2009

Investment Returns graph


Please Note: Members may receive slightly higher or lower returns than these figures depending on the timing of cashflows, end of year adjustments and processing of transactions by the administrator. Past investment returns are not necessarily an indication of future earnings. Final rates for the year will be declared in August.

Investment performance

Tasplan has been a consistently strong performer since our inception in 1987. The table below shows how we have performed each year.

Note that the Short Term Defensive and Longer Term Growth Options only commenced on 1 July 1999.

From 1 July 2002, two more investment options were introduced – the Equities and Cash Options.

Investment year
Crediting rate %
2007/2008 Equities Option
-12.9
Longer Term Growth Option
-10.1
Balanced Option
-5.8
Short Term Defensive Option
0.1
Cash Option
7.1
2006/2007 Equities Option
19.7
Longer Term Growth Option
17.4
Balanced Option
14.7
Short Term Defensive Option
9.0
Cash Option
5.4
2005/2006 Equities Option
20.3
Longer Term Growth Option
17.7
Balanced Option
14.4
Short Term Defensive Option
8.4
Cash Option
5.6
2004/2005 Equities Option
15.8
Longer Term Growth Option
12.9
Balanced Option
11.9
Short Term Defensive Option
8.6
Cash Option
4.5
2003/2004 Equities Option
19.1
Longer Term Growth Option
16.0
Balanced Option
12.7
Short Term Defensive Option
6.9
Cash Option
3.9
2002/2003 Equities Option
-7.3
Longer Term Growth Option
-5.3
Balanced Option
-1.9
Short Term Defensive Option
3.9
Cash Option
5.4
2001/2002 Longer Term Growth Option
-5.2
Balanced Option
-2.6
Short Term Defensive Option
2.0
2000/2001 Longer Term Growth Option
10.1
Balanced Option
8.1
Short Term Defensive Option
6.5
1999/2000 Longer Term Growth Option
13.4
Balanced Option
12.7
Short Term Defensive Option
9.2
Investment year Crediting rate %
1998/99
8.0
1997/98
10.0
1996/97
18.0
1995/96
9.25
1994/95
5.5
1993/94
6.5
1992/93
8.0
1991/92
10.0
1990/91
10.0
1989/90
17.0
1988/89
19.0
1987/88
18.0





Links to related articles:
Member investment choice
Where your money is invested
Investment policies



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General Enquiries: FREECALL 1800 005 166
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