REI Super's Balanced option, which a majority of our members are invested in, returned 3.37% for the quarter, and 3.37% for the financial year to date. Our Pension Balanced option has returned 3.84% for the quarter, and 3.84% for the financial year to date1.
| Performance | 3 mths
(%) | FYTD*
(%) | 1yr
(%) | 3yrs
(% p.a.) | 5yrs
(% p.a.) | 7yrs
(% p.a.) | 10yrs
(% p.a.) |
| Balanced (Super) | 3.37 | 3.37 | 9.58 | 11.36 | 9.15 | 6.71 | 7.18 |
| Growth (Super) | 4.53 | 4.53 | 12.64 | 15.22 | 12.28 | 8.92 | 9.32 |
| Balanced (Pension) | 3.84 | 3.84 | 10.35 | 12.69 | 9.58 | 7.09 | 7.54 |
1The above table's net investment returns are as of 30 September 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.
Key market developments over the September quarter 2025
Overview
- Australian shares rose 4.71% for the quarter and 10.56% over the year, led by small caps and Materials, while global equities surged with the MSCI ACWI ex Australia up 6.49% for the quarter and 23.02% annually, driven by strength in tech, communication services, and emerging markets.
- Fixed income showed steady gains, with the Bloomberg AusBond Composite up 0.40% for the quarter and 4.09% over the year, while global hedged bonds outperformed short term with a 3-month return of 1.02%.
- Australian REITs returned 4.77% for the quarter and 4.27% over the year, while global infrastructure gained 15.68% annually; international property was mixed, with FTSE EPRA Nareit ex Australia down 0.60% over the year.
- The AUD strengthened against major currencies, hitting a 10-month high against the USD, which dampened unhedged global investment returns for Australian investors.
- Markets remained calm in Q1, with emerging markets outperforming and bonds regaining appeal amid global rate-cutting cycles; domestically, economic recovery is underway, but concentration risk in Australian equities and cautious RBA policy suggest selective investing remains key.
Australian shares
Over the past quarter, the S&P/ASX 200 posted a respectable gain of 4.71%, lifting its 12-month return to 10.56%. This performance was bolstered by strong momentum in mid-cap and small-cap stocks, with the Small Ordinaries index up 15.31% over 3 months and 21.50% over the year.
Sector-wise, Materials led the charge with a 3-month return of 21.24%, followed by Utilities (+11.44%) and Consumer Discretionary (+9.60%). Over the 12-month horizon, Telecom Services (+28.29%), Financials excluding A-REITs (+20.86%), and Industrials (+20.21%) emerged as top performers. In contrast, Health Care and Energy lagged significantly, with Health Care down -14.25% and Energy slipping -3.10%, highlighting sector-specific challenges.
Global shares
Global equities continued their upward trajectory over the past year, with the MSCI ACWI ex Australia Net Return AUD delivering a robust 12-month return of +23.02% and a solid 3-month gain of +6.49%. This performance reflects broad-based strength across developed and emerging markets, with notable contributions from the U.S., Asia ex-Japan, and emerging markets.
Developed markets showed strong but uneven performance over the past year, with Austria, Spain, and Israel leading gains above 30%, while the U.S. and Canada remained solid contributors and Denmark notably declined. Sector-wise, global Information Technology was the standout, returning +12.41% over 3 months and +27.30% over the year. Communication Services also impressed, up +10.91% and +34.32% respectively, while Financials posted a strong 1-year gain of +27.16%. In contrast, Health Care and Consumer Staples lagged, with Health Care down -8.68% and Staples nearly flat at -0.32% over the year.
Emerging markets delivered a powerful performance over the past year, led by Korea (+36.07%), while China and Taiwan also posted impressive gains above 30%. Sector-wise, Information Technology and Materials stood out, with IT up +21.22% over 3 months and +33.38% over the year, and Materials surging +24.29% and +19.97% respectively. Communication Services followed closely, returning +36.29% over the year. In contrast, India and Indonesia lagged, with India down -7.98% and Indonesia slipping -13.68%, highlighting the varied momentum across the EM landscape.
Overall, the MSCI ACWI ex Australia’s performance highlights the strength of global diversification.
Bonds
Over the past 3 months, the Bloomberg AusBond Composite 0+Y Total Return AUD returned a modest +0.40%, while its 1-year performance stood at a stronger +4.09%, reflecting steady gains in Australian fixed income. In comparison, the Bloomberg Global Aggregate Total Return Hedged AUD delivered +1.02% over 3 months and +2.44% over the year, showing better short-term returns but slightly lower annual returns.
Global property & infrastructure
The S&P/ASX 300 A-REIT Total Return delivered a solid return of +4.77% over the quarter, while its 1-year performance stood at +4.27%, reflecting steady recovery in Australian real estate investment trusts. The S&P Global Infrastructure Net Return Hedged AUD gained +3.80% over 3 months and a robust +15.68% over the year, highlighting strong global infrastructure demand. Meanwhile, the FTSE EPRA Nareit Developed ex Australia NR Hedged AUD posted +4.25% for the quarter but remained slightly negative over the year at -0.60%, indicating mixed sentiment in international property markets outside Australia.
Currencies
The Australian dollar (AUD) strengthened against several major currencies during the quarter. It reached a 10-month high against the U.S. dollar in mid-September, trading at approximately 0.6669 USD, driven by a weakening USD amid rising U.S. jobless claims and expectations of Federal Reserve rate cuts. The AUD also gained ground against the euro, yen, and Chinese renminbi, reflecting broader optimism around Australia's economic outlook and global risk sentiment. This appreciation muted unhedged returns on global investments for Australian investors.
Changes to the Balanced Portfolio over the September quarter
Profit taken from equities following strong market performance to maintain appropriate SAA-relative positioning
Reduced exposure to high-performing valuation opportunities, specifically in China Tech Equities and Korean Equities
Reallocated into new valuation opportunities, including Uk Equities, Brazilian Equities, US Healthcare
Outlook
The tariff-induced volatility that shook markets in April feels like a distant memory. The first quarter was among the calmest in years. For all the disruptions in the world, little of it has shown up in the stock market—at least not yet.
While US large-cap stocks had an exceptional quarter, diversification paid off handsomely. Emerging markets (EM) had one of their strongest quarters in years and are now on pace for their best calendar year since 2017. China, the largest country in the EM index, was a key driver.
After years of US dominance, investors willing to allocate abroad have been rewarded. Nine months of outperformance doesn’t guarantee a regime change, but the trend deserves attention. Lower valuations, improving earnings, and tailwinds like a weaker dollar and rising fiscal spending in Europe, compared with belt-tightening in the US, may continue to support international equities.
Bonds, meanwhile, are reclaiming their reputation as valuable portfolio diversifiers. After back-to-back negative years in 2021 and 2022, many questioned the future of fixed income. Yet bonds are having their best year since 2020. With rate-cutting cycles underway by many central banks globally, the bond market may continue to heal the scars of recent years.
At home, the ASX 200 rose 4% in the September quarter, closing at 8,849 points, buoyed by a strong August reporting season before a typical September pullback. While valuations remain modestly above fair value - 5% on an equal-weighted basis and 10% on an index-weighted view - blue-chip stocks appear stretched. Woolworths, despite a 20% post-result decline, presents a potential turnaround story given its scale and margin advantages over Coles. Small caps outperformed and remain more attractively priced, trading 5% below fair value, supported by improving domestic economic conditions.
Market concentration remains a concern, with over half of the ASX’s two-year gains driven by just five stocks, particularly the major banks. Commonwealth Bank alone contributed a quarter of total returns, and banks now make up 25% of the index. With bank valuations elevated - except for ANZ - investors are increasingly exposed to the property cycle. However, opportunities exist beyond the banks: one-third of coverage is undervalued, and nearly 40% of those have economic moats. Energy stands out as the most undervalued sector, with Woodside trading at half its fair value and Santos at a 35% discount following a withdrawn takeover bid, potentially setting the stage for long-term upside.
Australia’s economy is showing signs of recovery, with real GDP growing 1.8% year-on-year in the June quarter, supported largely by household consumption. This marks a rebound from the sub-1% growth seen in late 2024, though it remains below the long-term trend. Per capita GDP also turned positive, albeit modestly at 0.2%. The labour market is softening, with unemployment at 4.2% and declining job vacancies, while wage growth stabilised around 3.5%. A shift from public to private sector hiring will be key to sustaining employment momentum.
Consumer spending is picking up, with July’s household spending indicator rising 5.1% year-on-year, outpacing inflation and boosting retail sales volumes. Meanwhile, the Reserve Bank of Australia held the cash rate steady at 3.6% in September, maintaining a cautious stance amid easing inflation. A strong July inflation print has tempered expectations for near-term rate cuts, with futures markets now pricing in a lower probability of a November cut. The upcoming September quarter CPI will be pivotal, especially if market services inflation remains elevated. While further easing is likely, the RBA is in no rush, viewing fewer cuts as a sign of economic resilience.
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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.
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