Thank you for trusting Energy Super to manage your superannuation as the market fluctuates in response to coronavirus.

You may be concerned about coronavirus and its effect on your superannuation investment.

Given the current impact of coronavirus on financial markets around the world, we have
received an increase in calls from members wanting to know if their retirement savings are
safe.

We understand it is easy to be anxious about the impact of the public health crisis on the
share market, and by extension, your superannuation investment. We’re encouraging our
members not to panic.

Now may not be the time to make major changes to your super.

But there are certainly some important steps to enable you to take charge of your
investment even in the face of the current market uncertainty.

The questions you need to ask yourself includes:

  1. How long will it be before I can access my superannuation?
  2. If I can access my superannuation, how much will I need over the coming months?
  3. Will I be invested for a period greater than one year? (the time it took for the markets to recover during the Global Financial Crisis (GFC))
  4. If I switch today, will I be crystallising the losses that financial markets are currently experiencing?

If you think through the answers to these, you may find you can either maintain your
investment or consider other ways of achieving your short term goals.


The most common member question is: What should I be doing?

It’s important to remember that markets fluctuate and every downturn has shown to be
temporary. Superannuation is a long-term investment and there are times we can expect
negative returns.

Just like we saw in the GFC, markets have historically rebounded. The share market has
also rebounded strongly after dips caused by other public health crises such as Ebola,
SARS and swine flu.

While you may be concerned about what to do, be careful before you make major changes
to your super.

Shifting your retirement savings into cash may be the wrong move when markets
experience volatility as we are seeing currently because it effectively locks in losses while
forfeiting gains linked to a market rebound. This effectively means you may miss the
opportunity to recover losses when the sharemarket eventually recovers.

Before making any change to your investment strategy, we’d encourage all of our
members to speak to one of our qualified financial advisers. If you already have a financial
adviser outside of Energy Super, please seek their advice.

Super funds are diversified which means they hold assets other than shares. A fall in
markets does not automatically translate to an equivalent decline in the value of super
balances.

What if you see your balance dropping?

For the majority of members, the answer is: do nothing.

Now may not be the time to make major changes to your super and you should pause before you react.

Sticking to your long-term investment strategy could be the most appropriate response.
For those not approaching retirement, a market downturn can be good for your super
investment in the long run, as contributing right now will buy higher units when the prices
are lower.

Call Energy Super or your financial adviser and seek their advice before making a decision
that may adversely impact your financial future.

What if I am feeling anxious?

If you are feeling anxious about the market, here are a few further points to consider:

  1. We saw this movement during the GFC and if you held fast, your portfolio today
    would not reflect those price drops.
  2. Friday 13 March 2020, saw the market open at -7% and closed at +4%, rebounding
    just over 12%.
  3. Monday 16March 2020, we saw the biggest drop and if you switched, you would not
    have benefited from the uplift on the following day.
  4. Refrain from checking your balance day-to-day. Remember the words of legendary
    value investor Benjamin Graham: “In the short run, the market is a voting machine
    but in the long run, it is a weighing machine.”
  5. The number of units you own has not changed, even though the value of each unit
    may have changed. There are no real losses crystalised unless you switch
    investment options or withdraw.
  6. Think about halting your pension payment for a period of time (you do need to
    draw-down a minimum in a Financial year).
  7. Think about contributing, where you could purchase more units at a lower price.

What is Energy Super doing?

Super is a long-term investment and as your super fund, we also remain focused on the
long-term.

Our investment team is actively monitoring the current situation, we will always take action
which is in the best interests of our members. We are confident our assets will stand the
test of the market movements and we will actively look to take advantage of any
opportunities in the current environment through cashflow programs. While the underlying
issues are different this time around, the GFC has taught us to stay the course and ensure
we remain in the investment option so we can benefit from any bounce back in prices. If
you have switched, it will be difficult to do this.

In the short video below, our Chief Investment Officer talks about the latest investment
news and Energy Super’s position.

Why is the unit price two days behind?

The unit prices we report for your investments (on the Member Portal) show the value of
the portfolio's underlying assets at the close of business, up to two business days earlier.
The unit prices for that day are calculated using the closing prices both Australian and
international markets, which may close later than the Australian market. This market close
data is then reflected in our fund valuations, which are calculated throughout the following
day and uploaded that afternoon or early the next morning.

If members wish to switch today, as long as it is prior to 5 pm it will use today’s unit price.
This price will be available either late the next day or early the day following. At this point
we make the switch using the date you chose for your switch. This will ensure assets are
appropriately priced at the time you made your switch.

We’re here to help

Before making a change to your investment strategy, we’d encourage you to speak to us.

We can help you make an informed decision based on your risk profile.

If you’re concerned, please call 1300 436 374, or drop us a line through our enquiry form,
and we can call you back at a time that works for you.

This article was prepared in March 2020 by Electricity Supply Industry Superannuation (Qld) Ltd (ABN 30 069 634 439) (AFSL 336567), the Trustee and Issuer of Energy Super (ABN 33 761 363 685), and may contain general financial advice which does not take into account your personal objectives, situations or needs. Before making a decision about Energy Super consider your financial requirements and read the Product Disclosure Statement, available at www.energysuper.com.au or by calling 1300 436 374.

This text is shown only on a small screen.

This text is shown on small screens and up.

This text is shown only on a medium screen.

This text is shown on medium screens and up.

This text is shown only on a large screen.

This text is shown on large screens and up.

This text is shown only on an xlarge screen.

This text is shown on xlarge screens and up.