REI Super's Balanced option, which a majority of our members are invested in, returned -0.5% for the quarter, and 5.44% for the financial year to date. Our Pension Balanced option has returned -0.37% for the quarter, and 6.16% for the financial year to date.
| Performance (%p.a.) | 3 mths | FYTD* | 1 yr | 3 yrs | 5yrs | 7yrs | 10yrs |
| Balanced (Super) | -0.50 | 5.44 | 5.41 | 5.52 | 8.81 | 6.11 | 6.07 |
| Growth (Super) | -1.48 | 6.01 | 5.90 | 7.26 | 12.34 | 8.09 | 7.71 |
| Balanced (Pension) | -0.37 | 6.16 | 5.51 | 6.07 | 9.67 | 6.42 | 6.36 |
Please note: The above table's net investment returns are as of 31 March 2025 and are net of investment fees and taxes.
Disclaimer: Future investment performance can vary from past performance, and you should not base your decision to invest in REI Super simply on past performance. Past earning rates are not an indicator of future earning rates. The investment returns of REI Super are not guaranteed, and the value of the investment may rise or fall.
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Key market developments over the March quarter 2025
Overview
Asset class performance
Note: The S&P ASX300 is the standard Australian Shares benchmark for the superannuation sector. Morningstar commentary figures are often based on ASX200.
Australian shares
Australian shares have started 2025 in the negative, with the S&P/ASX200 accumulation index falling -2.80% for the March quarter and bringing down the 12-month returns to +2.84%. Telecommunication Services was the best performing sector for the quarter, returning +5.76%. This was followed by Industrials (+2.46%) and Utilities (+2.21%). The largest negative returns over the quarter were seen in Information Technology, Healthcare and A-REITs with –18.23%, –8.99% and –6.55% respectively.
Global shares
The MSCI World Ex-Australia NR Index fell –2.13% over the quarter in local currency terms, with the 12-month return coming in at +7.50%. In Australian dollar terms, quarterly and annual returns were –1.94% and +12.34%, respectively, as the AUD declined against most major currencies during the March quarter.
In developed markets, Energy was the best performing sector up +9.22% over the quarter. Utilities followed with +6.09% and Financials with +4.88%. Information Technology -12.25% and Consumer Discretionary -11.17%, posted large declines over the quarter.
On the emerging markets front, it was mostly positive throughout the quarter with most sectors performing well, Consumer Discretionary the best performing sector with +12.96% followed by Communication Services +12.68% then Materials +7.97%. The negative performing sectors included Information Technology (-8.14%), Utilities (-0.60%) and Industrials (-0.26%). Over a 1-year period, there have been strong returns in a few emerging market sectors, with Communication Services up +30.93%, Consumer Discretionary +27.93 and Financials +17.22%.
Bonds
On the whole Bond markets globally were mostly positive for investors in the March quarter, albeit European and Japanese Bond markets did buck this trend. The Bloomberg AusBond Composite 0+Y TR AUD index was up +-1.29% for the quarter. Similarly, the Bloomberg Global Aggregate TR Hdg AUD index saw a positive return of +1.98% for the quarter.
Global property & infrastructure
Domestic listed property again experienced negative returns for the quarter of -6.55%, compared to global property which was slightly positive (+0.66%). Listed global infrastructure was positive with a return of +3.44% for Q1, with the 12-month number remaining strong at +18.55%.
Currencies
The AUD was mixed across the quarter, with a slight gain against the USD while losing ground against the JPY, GBP and the EUR. During the quarter the Reserve Bank of Australia reduced the cash rate by 25bps at its February meeting.
Changes to the Balanced Portfolio over the March quarter
- Profit taking in value international equity strategies which outperformed and rotating into growth international equities which lagged.
- Profit taking following strong performance in China equities and US Utilities.
- Increased the allocation to defensive sector US Health Care.
- Increased the hedge ratio as the Australian dollar depreciated.
Market update
Important perspective
President Trump’s tariff pronouncements rattled global markets in the first quarter of 2025. Australia was not immune. The benchmark S&P/ASX 200 index briefly entered correction territory in February, defined as a peak-to-trough fall of between 10% and 20%. However, over the entire quarter, the ASX 200 declined by just 4%.
Perhaps the sell-down isn’t surprising, given the ebullient reaction to Trump’s election victory in the final months of 2024. Before the correction, large-capitalisation stocks traded at a premium we’d only seen once in the past decade. We questioned why Australian investors reacted so positively to Trump’s America-first, anti-China agenda. A good deal of that unwarranted optimism has been checked.
On a market cap-weighted basis, the ASX200 still looks moderately overvalued. Of course, this is skewed by larger companies, many of which trade above fair value. Yet many opportunities exist outside the blue chips. However, on an equal-weighted basis, our coverage trades at an 11% discount.
The first quarter of 2025 was a reminder that markets don’t move in a straight line. After a stellar 2024, US large-cap stocks stumbled out of the gate, experiencing their first correction—a decline of 10% or more—since October 2023. Furthermore, the MSCI US Growth index finished 10.97% lower, following market news of China’s DeepSeek alternative in the pursuit of cheaper and more energy efficient AI access along with early expectations of President Trump’s tariff plans. By comparison the MSCI EU NR index returned +5.76% and the MSCI China NR Index rising +14.99% in local currency.
Outlook
President Trump’s sweeping new tariff regime announced in early April has sent global markets into a tailspin. Uncertainty has reached extreme levels as policymakers, businesses and consumers are grappling with how to adjust to the new US trade policy and how this may affect global trade, financial markets and even our own hip-pockets. With a high degree of certainty, President Trump’s tariff changes will likely continue to dominate the headlines and markets over the course of Q2 2025, with global markets likely reacting accordingly. As with all fiscal policy changes, there will be some benefits and some consequences as to the balance of these, only time will tell. Morningstar will continue to monitor closely key economic indicators such as inflation, employment and economic growth to gain insights for investors.
Domestically, the labour market is Australia’s economic bright spot, unemployment is near a 50-year low, and inflation has been waning, now sitting within the RBA’s 2-3% target band. On the tariff front, compared with the rest of the world, Australia got off lightly. Companies will be affected to varying degrees. We’re more concerned about the indirect impact of tariffs to Australia—specifically, the impact on China’s slowing economy. And the ongoing “trade war” between China and the US. That said, long-awaited stimulus from China’s authorities could more than offset the damage.
The March quarter underscored why diversification remains one of the best defenses against uncertainty. While US stocks declined, international and emerging markets provided a buffer, demonstrating the value of maintaining broad exposure across asset classes. More volatility may well be on the menu this year, attempting to predict and react to every market move often leads to worse outcomes. The best approach? Accept volatility as a normal part of investing, ensure portfolios align with long-term plans, and only make changes if the plan—not the market—calls for it.
Need advice?
If you need help choosing the right investments, our friendly helpline is here for you. You can access contributions, investments, and insurance advice as an REI Super member. We also offer competitive fixed fees for retirement strategies and comprehensive advice.
Call us today on 1300 13 44 33.
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Past returns are no guarantee of future performance and should not be relied upon as any guide to future performance. Furthermore, you should not base your decision to invest in REI Super solely on past performance. Investment returns can be volatile and may vary significantly over time.
The information contained in this article does not constitute financial product advice. REI Super does not give any warranty to the accuracy, completeness or currency of the information provided. Although REI Super makes every reasonable effort to maintain current and accurate information, you should be aware that there is still the possibility of inadvertent errors and technical inaccuracies. REI Superannuation Fund Pty Ltd ABN 68 056 044 770, AFSL 240569, RSE L0000314 Trustee of REI Super (ABN 76 641 658 449), SPIN REI0001AU, RSE R1000412. MySuper unique identifier 76641658449129. May 2025.
Financial advice about your superannuation is offered under the Australian Financial Services Licence (AFSL) held by a third party authorised to provide financial product advice, and not by REI Superannuation Fund Pty Ltd. The financial advice will be provided by one of our employees, who are Authorised Representatives of Guideway Financial Services Pty Ltd, ABN 46 156 498 538, AFSL/ACL #420367.