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How your super performed in the first quarter of 2024

by Verve

We’re happy to report Verve Super kicked off 2024 with strong returns. Here’s everything you need to know about how markets globally, and closer to home, impacted your super in the first quarter of this year.

The big picture

The first quarter of 2024 brought good news for investors, and even better news for funds like Verve with ethical screens in place.

In March, stock markets globally reached all time highs. The growth this quarter was led by the largest technology companies in the world, which continued to lead market gains as investors remain confident in the earnings growth from these companies.

Thanks to Verve’s socially responsible and ethical screening, we benefited even more from this trend than other investors might have. Our screens mean we don’t invest in lots of companies – like companies with all male boards of directors, fossil fuel companies, gambling companies or tobacco companies.

That means we have a bigger portion of money to invest in the companies that do pass our screens – and some of the tech companies that have been leading this global growth period do pass!

What contributed to performance

Nvidia was one of the top performers in international shares – it’s a technology company which specialises in artificial intelligence.

The company’s stellar performance this quarter was driven by the ongoing AI boom alongside its data centre business experiencing a wave of growth.

In Australian shares, it might sound counterintuitive but there’s some good news about a company we screen out. Mining giant BHP’s share price fell by about 12% in the first quarter of 2024.

BHP is actually the largest listed company in Australia, and that’s important to investors because the size of a company generally impacts what portion of a portfolio you invest in that company.

We don’t invest in BHP because part of its business is in coal, so it doesn’t pass our screens. That was good news for us this quarter, because our Australian shares performance wasn’t dragged down by the biggest company on the ASX having a bad quarter.

Meanwhile, Brambles had a strong quarter. Brambles is a supply chain logistics company listed on the ASX, operating in 60 countries. It’s one of the companies making sure supermarket shelves are stocked.

One thing we like about Brambles is it’s part of the circular economy. Brambles provides pallets, crates, bins and containers to all kinds of businesses. But it’s developed a way of sharing and reusing those resources to minimise its environmental impact.

Other strong performing companies in Australian shares were Suncorp, a bank and insurer which has committed to not investing in or funding new fossil fuel projects, and freight software provider Wisetech.

Your money having impact

Behind the scenes, our investment team has been working to add more investments with impact into what we call the alternative asset class. Alternative assets are things like infrastructure and property. Think solar farms, affordable housing developments and more.

It’s early days, but investments in this asset class will gradually grow. We wanted to tell you about it though, because some of the coolest things that super can invest in are in this asset class. For example, here’s what your money is doing in this area already:

Resolve Social Benefit Bond

The goal of this bond is to generate a financial return while improving the lives of people experiencing mental ill-health in NSW. Verve and other investors fund the Resolve Program, a recovery-oriented community support program which combines a residential service for periodic crisis care including integrated psychosocial, medical and mental health support; and a line for after-hours support from peers.

Synergis Fund
Through Synergis Fund, Verve Super is investing in transforming disability housing in Australia to support Australians on the NDIS to live independently at home or in specialist disability accommodation. Synergis Fund is also part of a coalition of sector leaders working together to develop a common outcomes framework to understand the impact of housing and in-home supports on the lives of people with disability.

Looking ahead

Despite the strong start to 2024, our investment team does expect market volatility to remain elevated for the rest of the year.

Market volatility refers to the extent that prices move up and down over a short period. We remain aware of volatility due to some uncertainty which surrounds the current economic backdrop.

This uncertainty is driven by slowing economic growth globally, stubborn inflation (a.k.a the high prices you’re seeing everywhere) and interest rate uncertainty. Another factor is evolving geopolitical risks around the world.

Verve Super doesn’t invest in fossil fuel companies, and one economic consequence of conflicts – including the current conflict in the Middle East – is spikes in the price of oil.

All of these big issues can impact the investment mix that makes up your super in different ways, so our team monitors these factors.

Verve Super’s Balanced Strategy returned 7% for the quarter and 15.7% over the last year.

Past performance is not a reliable indicator of future performance.

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