Watching a dip in the share market can be a nerve-wracking time for members but while drops can seem shocking, it’s important to remember they aren’t permanent and knee-jerk responses rarely produce the best outcomes for members.
Earlier this year, as part of smartMonday’s perpetual review process, our most popular investment option - the Aon MySuper lifecycle - received its regular investment health check and in July we proactively elected to make key enhancements to it.
These improvements included adding a small defensive allocation for younger members to reduce volatility. For older members, retaining the dominant allocation to defensive assets was important for preserving balances, as was adding a small allocation to growth to counteract member balance erosion caused by inflation and capital drawdowns.
smartMonday’s Senior Investment Specialist, Jolanta Willetts, points to the dynamic re-allocation between growth and defensive assets within Aon MySuper as an effective way to enable members to benefit from the potential higher returns of growth assets at a time in their lifecycle where they can ride out such shocks, while using the increasing defensive allocation as members age, adds more protection when there is less capacity to absorb such market fluctuations.
“We identified a need to introduce greater diversity and protections in the portfolio earlier than we did historically. This helps buffer members from the market oscillations recently witnessed in the riskier asset classes like Australian shares. The defensive allocation continues to play the lead role for those approaching retirement - when capital preservation becomes more critical.”
Members know superannuation is a long-term investment, and given Aon is responsible for one in every five dollars invested globally in the pension market we bring worldwide expertise to every stage of our investment strategy. It’s why for three decades we’ve been well placed to deliver portfolio growth against a suitable degree of risk and why we’ll continue to strive for that in the future.
As we continue to focus on a long-term strategy that is appropriate for our broad superannuation membership, your personal circumstances can have a meaningful impact on what might be the right investment for you.
Now, as ever, is a great time to seek help from your financial adviser. If you don’t have an adviser you can reach out to our smartCoach team on 1300 COACH 1 (1300 262 241) to ensure your investment strategy aligns with your individual risk appetite.
smartMonday is a registered trading name of Aon Hewitt Limited ABN 48 002 288 646 AFSL 236667 (Aon), the sponsor of the Aon Master Trust ABN 68 964 712 340 (the fund). The Trustee of the Fund is Equity Trustees Superannuation Limited ABN 50 055 641 757 AFSL 229757 RSE Licence L0001458. This document has been prepared by Aon. smartMonday PRIME, smartMonday DIRECT and smartMonday PENSION products are part of the Fund. Aon has taken care in the production of this document, the contents of which has been obtained from sources that it believes to be reliable. Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose that this document may be used and accepts no liability for any loss incurred by anyone who relies on it. Past performance should not be considered a guide to future performance.
The information in this document is general in nature and should not be relied upon as advice (personal or otherwise) as your personal needs, objectives and financial situation have not been considered. Before deciding whether a particular product is right for you, please consider the relevant Product Disclosure Statement or speak with your financial adviser. If you do not have a financial adviser, contact us to ask about the advice services you can access through your membership.
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