Investment performance and economic update: January 2026

Australian Retirement Trust (ART) Chief Economist Brian Parker provides an update on our long‑term investment performance.

ART’s QSuper Outlook portfolio, which is the MySuper default option for QSuper members under the age of 45, produced returns of 1.53% over the December quarter and 10.06% over the year to December 2025.¹ Longer-term returns remain solid, with the Outlook option producing growth of 7.36% p.a. over the 10 years to the end of December 2025.

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 December 2025.

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

World share markets enjoyed another solid quarter from October to December 2025, primarily due to the ongoing resilience of the global economy, optimism surrounding the impact of artificial intelligence (AI) and the prospect of further interest rate cuts from some of the world’s major central banks.

All the major developed equity markets enjoyed positive returns, with shares in Japan, the UK and the eurozone outperforming shares in the US. Emerging share markets performed strongly, generally outperforming the developed markets over the quarter. While Chinese shares posted losses over the quarter, gains in Korea, Taiwan, India and Brazil made the largest positive contributions to the returns from emerging markets shares.

The Australian dollar was stronger against a range of emerging and developed market currencies, which detracted from unhedged international share returns over the quarter and the calendar year.

In contrast to overseas share market gains, Australian shares lost ground. Positive returns in materials (particularly mining), energy and industrials shares were more than offset by losses in all other industry sectors, particularly IT, consumer discretionary and healthcare shares. 

Global bonds managed to produce positive returns for the quarter, despite longer term government bond prices falling in most major markets. Shorter term bonds generally fared better on hopes for further interest rate cuts from the US Federal Reserve. Other central banks and corporate bonds performed well, generally outperforming government securities. Japanese government bonds were among the worst performing in 2025. Japanese inflation has risen over the past year, and the Bank of Japan has been raising official interest rates, in contrast to monetary policy trends elsewhere.

Australian bond returns were negative for the quarter. Bond prices fell sharply, with the 10-year government bond yield rising to its highest level in two years before easing back late in the quarter. Some disappointing inflation news and comments from the Reserve Bank of Australia (RBA) led markets to expect no further interest rate cuts this cycle and raised the prospect that interest rates would need to rise in 2026. 

The outlook and what is ART doing?

The global economy held up remarkably well in 2025, despite the uncertainty around US tariff policy. This is due to several factors, including lower interest rates across much of the world economy, a winding back of the Trump Administration’s initial ‘Liberation Day’ tariff proposals, and a surge in investment associated with the growth of AI. 

Here in Australia, economic growth has improved over the past year. Private demand accelerated, driven by household consumption, business investment, and the beginnings of a recovery in housing activity. Inflation has declined, allowing the RBA to reduce official interest rates by 0.75% over the course of 2025. However, the improvement in the overall economy, together with a reasonably tight labour market and some disappointing recent inflation developments, has led to a marked shift in financial market expectations and the RBA’s commentary. Markets are now pricing in the likelihood of cash rate increases over the course of 2026. 

ART does not design portfolios based on our 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 quarter, our Dynamic Asset Allocation (DAA) strategy was positioned somewhat defensively: maintaining an overweight exposure to sovereign bonds and an underweight position in equities. However, we also made regular adjustments to DAA positioning in response to market volatility, which caused changes in relative value between asset classes.

At the end of December 2025 within DAA’s shares allocation, we preferred Japanese and European shares over shares in the US, Australia and Canada. In fixed income, we were overweight in French, Australian and UK sovereign bonds and maintained underweight positions in German, US and Canadian bonds. In Japan, bond yields have risen substantially in response to higher inflation and tighter monetary policy from the Bank of Japan. In response, we have moved to be modestly overweight Japanese bonds for the first time since February 2023. The DAA strategy’s currency exposure favours Asian and Latin American currencies over the Swiss franc, the UK pound and the euro.

ART continues to hold a substantial allocation to unlisted assets, such as private equity, infrastructure and property. 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 quarter, ART’s real estate team acquired a 19.9% stake from the Scentre Group in Westfield Sydney, one of Australia’s most iconic retail destinations, for $864 million. The team also made ART’s first commitment to the build to rent sector in Australia, by investing in the $1.7 billion LIV Mirvac Fund, which owns approximately 2,200 apartments in Brisbane, Sydney and Melbourne. 

Our infrastructure team made an additional investment of $600 million into ElectraNet, South Australia’s regulated electricity transmission, raising ART’s stake to just over 28%. The team also added a further $500 million to ART’s investment in AusNet, a diversified regulated energy utility in Victoria, with the additional capital used to fund energy transition-related growth projects. 

Help to choose your investments

How your super is invested can significantly influence your retirement savings. Our online advice tool or a financial adviser can help you choose the right blend of QSuper investment options for your needs. Advice about your QSuper account is included with your membership.²

Book an appointment online or call 1800 643 893.

Past performance is not a reliable indication of future performance.

1. After investment fees and costs, transaction costs and tax, but before administration fees.

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