How your super performed (Oct-Dec 2024)

The final quarter of 2024 was marked by big shifts driven by political changes and economic policies. Here’s everything you need to know about your Verve Super fund’s performance from October through December 2024.

TLDR: Your super returned 3.66% over the quarter and 11.57% over the whole of 2024, ending a pretty strong year for markets overall. Scroll down to see all the numbers, for read on for the back story.

Donald Trump’s election to the White House was terrible news for gender equality, DEI initiatives and the climate – all of which disappeared from US Federal Government policies – and also increased market volatility. At first, the market seemed happy with his pro-business stance, including proposed tax cuts and deregulation, driving a market rally. Industries expecting to benefit included financials, small business, tech (especially if connected with Trump sidekicks like Elon Musk) and even cryptocurrencies. However, companies that rely on government spending, such as healthcare and steel, saw declines amid concerns about tariffs and policy uncertainty.

After the initial excitement wore off, some of these gains had fizzled out by December as investors reassessed the sustainability of these economic plans. Big Tech mostly recovered from their November dip, but other sectors for the most part gave back some of their post-election winnings. 

Soon after his inauguration, Trump’s imposition of punitive trade tariffs on the US’s closest trading partners Canada, Mexico and China, sent ripples across the global economy that may continue to play out for some time. The key takeaway? Market direction is uncertain, but investors will keep an eye on sectors that stand to benefit from policy shifts, such as technology (particularly anything to do with Tesla).

Predicting what Donald Trump might do next will be challenging, given his history of aggressive rhetoric and lesser action, but it's undeniably unfolding into one of the most gripping economic stories of 2025, with significant market implications

While the US Federal Reserve has been adjusting interest rates in response to economic conditions, a strong job market makes inflation a concern. Global markets are sensing a change from the Fed, with other countries cutting rates to address their softening growth.

Here in Australia,  inflation has fallen to within target levels.  This happened more rapidly than the Reserve Bank of Australia (RBA) had expected, so with cautious optimism it decided to lower the cash rate in February, by 25 basis points to 4.10%.

This could impact everything from mortgage rates to stock market performance. Lower rates generally make borrowing cheaper, boosting spending and investment. The rate cut reflects a cautious sense of optimism about recent progress, while also highlighting the importance of keeping a close eye on global economic trends, domestic demand, and inflation patterns as they continue to assess potential risks to the economy., sSuch as Trump’s trade war, which may contribute to a weakening Australian dollar due to our trade exposure to China.

Despite Trump’s best efforts, the shift towards sustainable investing continues to gain traction. Companies that contribute to the transition to a low-carbon economy are increasingly seen as strong long-term investments.

One key area of opportunity lies in alternative assets – that is, those that aren’t traded in share markets but are direct investments in things like sustainable energy infrastructure and efficient global supply chains (such as logistics centres).  The AI boom is fuelling rising energy demand. Thanks to their cheaper, faster infrastructure, renewable energy projects stand to benefit - along with energy security initiatives such as battery storage - becoming attractive options.

Your super beat the market median of about 11%, thanks to 2024’s impressive global returns in global investment markets. US tech (with everyone vibing AI innovation) helped fuel these gains, and Verve Super’s ethically screened investment approach helped protect your super from another bad year for fossil fuel stocks. However the Trump effect, combined with uncertainty over interest rates, fuelled global volatility on the final quarter and triggered a sell-off at the end of the year.

In Australia, weaker growth during the quarter was mainly due to a struggling materials sector, particularly iron ore, which suffered from decreasing demand from China’s construction industry. Our small domestic tech sector also struggled to keep up with global shares, but Australian equities managed to return double digits.

 In the bond market, both global and domestic bonds finished the year in negative returns, driven by conflicting economic signals. With the Australian 3 and 10-year bond yields experiencing significant fluctuations. While the RBA’s initially cautious approach offered short-term market stability, the subsequent drop in unemployment then undermined this positive effect, pushing bond yields higher.

Overall, 2024 was a stellar year for for Australian superinvestment markets, thanks to a combination of falling inflation, lower interest rates globally and surprisingly strong economic growth. This all helped your super’s strong performance, with Verve outperforming the average equivalent super fund*.

Looking ahead through 2025, all eyes are on the US economy. Trump is making sweeping changes and has already ignited a trade war with his closest partners. With the US economy already performing strongly through 2024, specific sectors are likely to benefit from his policies; but elevated valuations of some of these companies makes them more vulnerable to changing interest rates. 

As political events and economic data continue to drive market fluctuations, a well-diversified portfolio remains the best strategy to manage risk. We’re therefore continuing to invest more into alternative assets, especially those that benefit from sustainability drives. Securing the energy supply amid mushrooming demand will be a key investor focus, so we’re balancing the search for high-return equity investments with medium-term debt investments that can provide stable and attractive returns.

One US company making waves (well, rays) in your super’s renewable energy assets is First Solar. Rigid but ultra-thin solar PV modules are responsibly produced and eco-efficient. Its production facilities can transform sheets of glass into ready-to-roll solar panels in four hours, and its thin modules claim to have the smallest environmental footprint in the solar industry.

First Solar is among the mix of global investments in your super that screen out fossil fuel, gambling and weapons companies, and is indirectly held by the fund through your international equities' exposure. As renewables continue to deliver lower-cost, quicker-to-install solutions to the energy crisis compared to dirty fossil fuels, companies like this are ones to watch.

And now the part you’ve been waiting for... How has your super performed over the past three months? Here are the latest returns for Verve Super’s Balanced Strategy.

Past performance is not a reliable indicator of future performance.

*Source: Chant West. More information available here.

Data source: SuperRatings Accumulation Fund Crediting Rate Survey.

Performance shown net of investment fees and taxes, annualised performance shown for periods greater than 1 year. Past performance is not a guide to future performance.

Investments may be held directly, or indirectly through Exchange Traded Funds (ETFs) and other managed investment vehicles.