Q+A: What drove super returns — and what's next for investors?
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What investment themes shaped super returns in the last financial year?
Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics and more. I'm Sean Aylmer. With the 2026 financial year behind us, many Australians will now be checking their super funds to see how they performed over the past 12 months or so. Beyond the headline returns, the year has been shaped by some big investment themes, artificial intelligence and big tech, tariffs and emerging markets re-emerging in some cases, and a level of geopolitical uncertainty that shows few signs of easing. So, what's really driven performance over the past year, and where should investors be looking for the next year?
Why have superannuation returns been so strong despite global challenges?
Remember, this is general information only, and you should seek advice tailored to your circumstances before making investment decisions. Jonathan Armitage is Chief Investment Officer at Colonial First State, which, as we were approaching the end of the financial year, appeared to be closing out a pretty successful 12 months or so. Jonathan, welcome to Fear and Greed Q&A. Thanks a lot for having me on. What made 2026 a unique year or was it a unique year?
How did emerging markets perform in the past year?
Well, I think you identified a number of the sort of factors in your sort of opening remarks. I mean, we've had some very strong returns from equity markets, but at the same time, it's been against a backdrop of two conflicts, an energy spike And a number of other sort of ongoing issues which have caused disruption, whether or not it's to sort of supply chains, policy uncertainty. So there is a long list of things that could have upset markets. And yet we're looking at returns for an awful lot of superannuation members, which will be double digit, which is a great result. Why?
What role does artificial intelligence play in investment returns?
Why have super returns done so well? So I think the primary drivers have been in equity markets. If you look at global equities overall, they performed again very strongly. A lot of that has been driven out of the United States, but you've also seen very strong performance out of markets like Japan. in Aussie dollar terms, Japan was up about over 40% over the last 12 months or so. And you've also seen very strong returns out of emerging markets, particularly markets like South Korea, Taiwan, and also China.
How has the local Australian market performed compared to global markets?
And those emerging markets, that is mostly a chip story?
It's been in part driven by that. But if you actually look at the returns from markets other than Taiwan and South Korea, where it has absolutely been driven by the AI ecosystem, you've actually seen returns a little bit more broader than that. But technology has been an important driver to the returns that you've seen both in emerging markets and also elsewhere.
What about the local market? We're just staying with equities before we move on.
What are the implications of rising interest rates on investments?
That's been a tougher market in many ways. And I think the ASX 200 was up 2.7% or something or other for the full year. Very mining centric. If you're on the miners, well done. If you're in the healthcare and tech stocks, not so well done.
Yes, it's been, as you correctly pointed out, it's been quite a bifurcated equity market over the last 12 months or so.
What investment opportunities should investors consider for the next year?
I think one of the other things that has been a feature of the investing environment here in Australia is that the interest rate environment has been going in a slightly different direction than you've seen in other developed markets. You've seen inflation remaining quite stubborn here. You've seen actions from the Reserve Bank to bring inflation under control. And that's been running sort of contrary to what you've seen over the last 12 months or so in other markets.
So as we, well, actually, before we push forward, what about other asset classes over the past 12 months? Let's cover off there because the world is bigger than equities. I think, you know, when we're talking about fixed assets and alternates and that sort of thing, that sort of thing.
Yeah, there's no doubt that equities have been an important driver. I think one of the things that we've noticed at CFS is that you've actually seen quite a bit of volatility in fixed income markets.
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Chapters
7 chapters
1
What investment themes shaped super returns in the last financial year?
0:06–0:45
2
Why have superannuation returns been so strong despite global challenges?
0:45–1:13
3
How did emerging markets perform in the past year?
1:13–1:57
4
What role does artificial intelligence play in investment returns?
1:57–2:33
5
How has the local Australian market performed compared to global markets?
2:33–3:09
6
What are the implications of rising interest rates on investments?
3:09–3:32
7
What investment opportunities should investors consider for the next year?
3:32–11:21
Speakers
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