Investment performance and economic update

Australian Retirement Trust (ART) Chief Economist Brian Parker recaps our long-term investment performance.

ART’s QSuper Lifetime Outlook group, which is the MySuper default option for QSuper members under the age of 45, produced returns of 4.3% over the June quarter and 11.7% over the year to June 2025. Longer-term returns remain solid, with the Outlook option producing a return of 6.9% p.a. over the 10 years to the end of June 2025.¹

Other investment option returns can be found here. The table below shows returns from the major publicly traded asset classes for periods to the end of June 2025.

Sources: Bloomberg, Australian Retirement Trust. Past performance is not a reliable indication of future performance.

Global share markets enjoyed remarkably strong returns over the June quarter, despite intensifying geopolitical tensions, persistent uncertainty over US trade and fiscal policy, and diverging central bank actions.

After share prices fell sharply in early April in response to the ‘Liberation Day’ tariff announcements in the United States, President Trump’s decision soon after to pause most of those tariffs for 90 days sparked a massive resurgence in world share markets. Market volatility increased periodically during the quarter, some days exceeding levels last observed during the pandemic.

Over the quarter, all the world’s major share markets recorded solid gains, with the US outperforming Japanese, European and UK shares. Nearly all emerging share markets produced positive returns, with shares in Korea, Mexico, India and Taiwan among the best performing of the larger emerging markets.

Australian shares were among the best performing in the developed world over the quarter. While the materials sector lost ground, all other major industry groups enjoyed positive returns, with shares in the IT, financials and telecommunications sector the best performing.

Australian listed real estate securities (A-REITs) were the best performing publicly traded asset class over the quarter. However, a 20.7% return from Goodman Group, the largest company in the index, accounted for just over half of the 13.4% quarter return from the asset class.

Australian and global fixed income returns were positive over the quarter, with Australian bonds generally outperforming global markets. The Reserve Bank of Australia (RBA) further reduced the official cash rate in May, joining central banks in Europe, NZ the UK, Korea and India in easing monetary policy. In June, the RBA surprised the market by keeping the cash rate on hold citing its need to see further evidence that inflation can moderate towards the middle of the RBA’s inflation target band.

The Australian dollar was stronger against a range of emerging and developed markets currencies, which detracted from unhedged international share returns.

The outlook and what is ART doing?

The outlook for the global economy over the year ahead remains highly uncertain, particularly due to US trade policy, geopolitical tensions and concerns around US Federal Reserve independence. It remains unclear the exact level of tariffs that will eventually be applied to US trading partners, as does the extent of the potential impact to global trade, business investment and economic growth.

On inflation, additional tariffs represent a one-off boost to the level of prices, but that will not necessarily lead to ongoing higher inflation, and hence higher interest rates. However, recent survey data point to a significant increase in long-term inflation expectations among US consumers: a development that may limit the extent to which the US Federal Reserve can reduce interest rates if economic conditions deteriorate in the US and elsewhere because of trade disruption.

Here in Australia, inflation has fallen, and overall economic growth remains quite weak: a combination that has allowed the RBA to reduce official interest rates, despite ongoing concerns over a labour market that remains reasonably tight. Over the coming months ART expects further reductions in the official cash rate, particularly given the heightened uncertainty over the global growth outlook and the impact of US trade policy on Australia’s economy and those of our major trading partners.

ART does not design portfolios based on its own or anyone else’s short-term economic, market or geopolitical forecasts. However, our investment team and our external investment managers do seek to capitalise on opportunities that inevitably emerge during times of heightened market volatility.

Over the April-June quarter, our Dynamic Asset Allocation (DAA) strategy slightly increased our exposure to sovereign bonds in favour of a reduction in our equity allocation. We actively adjusted positioning in response to market volatility during the quarter, particularly around ‘Liberation Day’ where we raised our equity allocation following market weakness, and subsequently reversed those positions as markets recovered.

At the end of June 2025, our DAA strategy slightly favoured bonds over shares and cash. The strategy also sought to take advantage of significant differences in relative value between countries. Within DAA’s shares allocation, we preferred Japanese shares over shares in the US and Australia. In fixed income, we were overweight in France, UK, Italy and Australia and maintained underweight positions in Canadian, German and Japanese bonds. DAA also turned slightly underweight US bonds. The DAA strategy’s currency exposure is underweight the US dollar, while favouring Asian and Latin American currencies.

ART continues to hold a substantial allocation to private assets, particularly the key unlisted asset classes – real estate, infrastructure, private equity and private debt. As a large superannuation fund, we have well-diversified portfolios of these assets that we expect will deliver strong, long-term returns, while reducing our members’ exposure to share market volatility.

During the April-June quarter, ART’s private equity team co-invested alongside Pacific Equity Partners in Opal Healthcare, the largest residential aged care owner and operator in Australia with 138 facilities and over 13,500 care beds across five states. The team also committed US$100 million to the Community Capital Private Equity fund (CCPE), a private equity fund-of-funds. In addition to providing access to best-in-class private equity managers at compelling fee terms, CCPE provides an additional social benefit with the majority of CCPE profits granted to support Australian social purpose organisations working on a range of societal issues including mental health, education, domestic violence, First Nations affairs, out of home care and homelessness.

Help to choose your investments

How your super is invested can have a big impact on what you'll have in retirement. Our online advice tool or speaking with a financial adviser can help you select the right blend of QSuper investment options for you. Advice about your QSuper account is included with your membership.² Learn more at qsuper.qld.gov.au/advice.

Book an appointment today online or call 1800 643 893.

1. Past performance is not a reliable indicator of future performance. Returns for QSuper Outlook up to 30 June 2024 are after administration fees and costs, investment fees and costs, transaction costs and investment taxes. From 1 July 2024, investment performance is after investment fees and costs, transaction costs and investment taxes, but before administration fees and costs. You should consider this when comparing returns between options.

2. ART Financial Advice Pty Ltd (ABN 50 087 154 818 AFSL 227867) is responsible for the advice it gives and is a separate legal entity. Read the Financial Services Guide for more information.