Cbus’ portfolio positioned defensively in 2024

Cbus Super has delivered a commendable return of 9.49 per cent for its Growth (MySuper) option for calendar year 2023, driving its 10-year average return to 7.60 per cent per annum.

“Our investment team navigated some difficult market conditions last year, with rising interest rates, high inflation, some pressures in the commercial property market, and global conflicts creating a challenging economic environment,” said Cbus chief investment officer Brett Chatfield.

“However, our robust and well-diversified investment strategy has meant our members still enjoyed strong returns.”

The fund expects interest rates to remain higher than current market pricing trends, although it sees an end to most tightening cycles in developed markets.

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Still, inflation continues to linger above desired targets, labour markets remain tight, and wages growth is still strong, presenting investment challenges in 2024, Chatfield said.

“We remain slightly underweight equities but have recently moved to a more neutral stance with respect to fixed interest,” he said.

“Some property sectors like office remain challenged, but we have a very high-quality, sustainable portfolio.”

In the second half of 2023, the $85 billion fund announced changes to its strategic asset allocation, completely removing an allocation to global real estate investment trusts (GREITs) from the majority of its portfolios.

In an update at the end of September, the fund said its GREITs allocation made up 15 per cent of its property holdings.

However, it took the decision to remove this from its High Growth, Growth Plus, Growth MySuper, Conservative Growth, and Conservative options in the accumulation, transition to retirement (TTR), and Super Income Stream (SIS) options.

Reflecting on the portfolio heading into the new year, Chatfield said: “Our investment options remain well diversified and are designed to withstand any periods of short-term market volatility we may see in 2024.”

Cbus saw a number of executive changes last year, with Kristian Fok stepping into the role of chief executive and his deputy Mr Chatfield stepping up to lead investment strategy as CIO.

It welcomed Alexandra Campbell as deputy CIO and Alexandra West as chief strategy officer.

Additionally, Nancy Day was named chief operating officer and Natalie Hannemann came on board as chief transformation officer.

The slew of new appointments were crucial steps towards enacting a renewed strategy for the fund, according to CEO Fok.

“We’ve had a period of growth through mergers that has increased our member base and our reach into the media, arts, print, energy and electrical sectors,” he said.

“We need to continue to be on the front foot about how we evolve Cbus, aligning our operational capabilities so we can set ourselves up for future growth and continued long-term investment performance, and have a strategic focus on the way we work.”