smartMonday had outstanding returns in 2021

Despite an uncertain outlook toward the end of the year, a resilient market led to impressive gains, explains Ed Tomlinson.

Driven by the energy of economic recovery, investment markets recorded excellent returns for smartMonday members in the 2021 calendar year.

It was growth investments – such as Australian and international shares and property – that performed strongest last year, fuelling significant gains in smartMonday’s growth-focused investment options and increases in most other options.

In the table below we compare smartMonday performance with the median result of comparable super options across several time periods, highlighting where smartMonday has outperformed. You can review our full investment performance for the year here.

A word of caution to smartMonday members: 2021 investment returns captured a period of tremendous economic recovery, they shouldn’t be viewed as typical, and are unlikely to be repeated as we move forward in 2022.

It’s hard to go past the devastating impact of the pandemic in 2021, but it was joined by inflation and later in the year the prospect of rising interest rates. But despite all that, it was low interest rates and economic growth that kept the market surging, seeing us through the year to deliver strong returns.

• While the pandemic had a massive social impact last year, particularly in the last quarter of 2021, several factors such as higher vaccination rates meant it had less impact on the global economy than if we were unprepared.
• Inflation may have a longer and more powerful impact, with the US economy leading the global upswing in prices in November with its consumer price index increasing at its fastest since 1982, according to figures from the US Bureau of Labor Statistics. It was a combination of labour shortages, generous government economic support measures and the pandemic hampering the global supply of goods, that led to such price increases.
• Rising inflation fuelled greater talk of the need to raise interest rates toward the end of the year. A major reason we’ve seen such dramatic investment returns in 2021 was low interest rates, so the prospect of those increasing does make investors anxious, which has a dampening effect on financial markets.

All these forces will influence market performance in 2022, where we expect less growth and possibly increased volatility.

Ed Tomlinson is head of investments at smartMonday.