Technology and Artificial Intelligence stocks drive performance

We manage a range of asset classes that are the building blocks for the Plum MySuper Growth Portfolio.

Managing these asset classes and their allocation within the Portfolio ensures we balance risk and return over the financial year, and work towards driving longer-term performance for our members.

The Portfolio’s exposure to international stocks, particularly US technology stocks, was a key driver of performance over the course of this financial year. Global stock prices made especially solid gains given the continued optimism on the prospects for ‘Artificial Intelligence’ (AI) and renewed hopes for lower interest rates later this calendar year.

In particular, the largest AI chipmaker – Nvidia – a company in which the MySuper Growth Portfolio is invested – led the charge with a 192% stock price gain given strong revenue and profit growth. In fact, Nvidia’s stock has experienced a remarkable 3001% price rise over the last five years*.

The Plum MySuper Growth Portfolio also benefited from its investments in extended and alternative credit strategies, which can be described as loans made by investors to commercial borrowers. The return patterns from these strategies differ from those provided by shares and so are valuable sources of diversification within the Portfolio, as well as returns.

Our investments in private and unlisted assets

The strong performance from global shares over the past 12-months was so profound that it overshadowed returns from the Portfolio’s unlisted assets.

Unlisted assets – investments in companies and businesses not listed on stock markets - provide the Plum MySuper Growth Portfolio with valuable sources of diversification which have, in recent years, contributed significantly to performance. Their continuing presence in the Portfolio means that returns are not dependent on just a handful of asset classes for performance, but rather potential returns can come from many differing sources.

Our unlisted real estate investments are currently weighted towards the industrials sector, which continues to benefit from the e-commerce and digitisation trends. These assets are less exposed than assets in the office and retail sectors, which have seen their valuations come under pressure on the back of higher interest rates.

Outlook and preparing the Portfolio against potential market downturns

The recent upswing in global equities is an important reminder to look past short-term investment returns and focus on consistent, positive longer-term performance.

Global shares have performed so well that valuations of some of the big technology stocks in particular are now starting to look ‘stretched’. Amid this heavily tech-powered rally, investors should not lose sight of finding opportunities elsewhere.

As such, we enter the new financial year with a cautious but constructive outlook. Consistent with this cautious view, we will continue to rebalance the Portfolio into markets that have underperformed while taking gains in markets that have outperformed.

Investment markets fluctuate over time, that’s why we’re focused on delivering consistent positive returns for members over longer periods than just one year.

Our robust investment strategy – centred on building a well-diversified portfolio that includes investments across all asset classes – underpins our approach to deliver future long-term performance.

The MySuper Growth Portfolio’s assets—shares, bonds, private equity, unlisted assets and alternatives— work together to smooth out market ups and downs in order to target consistent returns so our members can work towards achieving financial wellbeing in retirement.