Rest delivers another strong calendar year of returns

Rest, one of Australia’s largest profit-to-member superannuation funds, has delivered double-digit returns in its flagship Growth investment option for calendar year 2024, and believes the global economy remains on a solid footing for 2025.

Rest’s default MySuper Growth investment option returned 11.19% for calendar year 2024 – the second consecutive calendar year of positive returns - underpinned by the continued strong performance of listed share markets and international equities in particular.

Importantly, Growth has also delivered strong long-term annual returns of 8.34% since it began on 1 July 1988.

Rest’s High Growth option and its [RIAA certified Sustainable Plus] Sustainable Growth option also benefited from the strong performance of share markets, returning 14.09% and 14.08% respectively for the calendar year. The low-cost Overseas Shares – Indexed option returned 28.05% over the 12 months.

Rest’s interim Co-Chief Investment Officer Kiran Singh said 2024 had reached a positive conclusion, after largely playing out as the fund expected with moderating, albeit persistent, inflation and higher-for-longer interest rates.

"Global share markets were stand-out performers - especially the US - during the past year. With several central banks moving to ease monetary policy and markets responding positively, we anticipate this should continue in 2025," says Mr Singh.

"Equity valuations are elevated but, for now, they are supported by continued economic resilience and earnings growth.

"Inflation is coming down in major developed economies and employment is generally softening. We expect central banks will continue to ease rates. We will watch policy uncertainty in the US closely, but we broadly expect outcomes to be market friendly.

"Of course, upside surprises to inflation and inflation expectations risk negatively impacting rate trajectories should they arise. However, we firmly believe that being selective and focusing investment into assets with good fundamentals – strong balance sheets and stable and consistent earnings – are expected to support the continued generation of strong returns for members.

"I’m thrilled with the overall returns we’ve delivered to our 2 million Rest members during the past 12 months. Strong investment returns over the short-term help support our long-term investment goals. We continue to focus on a much longer time-horizon than a single year, with most of our members many decades from retirement.”

Rest’s interim Co-Chief Investment Officer Simon Esposito says Rest will continue to focus on the 5 long-term megatrends it expects will change society and markets more broadly: decarbonisation, deglobalisation, demographics, digitalisation, and debt and central bank policy.

"The 5 megatrends are informing our scenario modelling for future market expectations. Thanks to the influence of these megatrends, we believe investors won’t be able to just rely on a uniform increase in valuations across all assets, but will need to be more selective to be successful,” says Mr Esposito.

"We continue to seek investment opportunities that are well-placed to benefit from these megatrends, and add to those we’ve secured recently.

"For example, our $1 billion commitment to Quinbrook Infrastructure Partners, which will give us exposure to sustainable, hyper-scale data centres in the US and Queensland, is one way Rest can contribute long-term financial benefits to our members in an increasingly digitalised world.

"Similarly, we believe the onshoring and diversification of supply chains thanks to deglobalisation is generating valuable investment opportunities in industrial property. We have expanded our industrial property venture with Barings over the past year and now jointly hold a portfolio of around 475,000 square metres of leasable industrial space in prime locations across Sydney and Melbourne."