We’re coming off a strong base 

After delivering robust returns in 2023 and 2024, share markets have entered a period of volatility during the month of March 2025.  

TelstraSuper Acting Chief Investment Officer Kate Misic notes that such fluctuations are not uncommon, especially following periods of strong market performance.  

“In recent years, members with exposure to listed equities have enjoyed strong returns,  driven in part by the positive outlook for the biggest US companies, often referred to as the Magnificent 7," she said.

"This positive outlook was supported by factors like falling inflation and solid economic growth. However, because the market had already factored in this positive outlook, it became more sensitive to any negative changes to these economic variables, brought about in part by Trump’s trade and tariff policies, which lead to the recent downturn."

Is this the "Trump Effect"? 

Concerns surrounding President Trump’s tariff policies have raised fears among investors and business leaders that these measures could dampen U.S. growth and push inflation higher. 

Other geopolitical factors – such as increased European defence and infrastructure spending— are also reshaping investor sentiment.  Such spending acts as stimulus for leading to an improved outlook for European growth. 

This combination has resulted in US equity markets declining while European equity markets have delivered positive returns since the beginning of the year. 

“Gold prices have seen record highs as investors turn to safe haven assets, and Chinese equities have gained momentum, particularly in the tech sector following the surprise announcement by DeepSeek of its AI capabilities,” said Misic. 

Building portfolios to weather all market conditions 

TelstraSuper’s diversified investment options are spread across multiple asset classes. This diversification helps to manage risk by ensuring that while one asset class may be affected by volatility, others may continue to perform well. 

TelstraSuper employs a dynamic asset allocation approach, which enables the Fund to adjust its exposure to various asset classes based on fundamental outlooks, valuations, and market sentiment. 

“Market volatility presents both risks and opportunities,” said Misic. “We build our portfolios with the goal of generating positive long-term real returns.” 

What’s the outlook for my super? 

Misic says that the outlook for performance in 2025 will depend on various factors including economic conditions, geopolitical events, and policy decisions.  

“While we currently have a neutral medium term outlook, volatility may remain elevated in 2025 as Trump continues to roll out policy announcements at a fast pace and global markets keep reassessing the potential impacts of these policies on companies,” said Misic. 

However, Misic cautions that now is not the time to deviate from your long-term plan, particularly without seeking advice first. 

“I’d encourage members to remember that superannuation is a long-term investment vehicle, designed to withstand short-term market fluctuations.  Staying informed, maintaining a diversified portfolio, and considering professional advice – particularly for retirees – are key strategies for navigating any potential challenges.” 

Need help? 

If you’d like to learn more about how investment markets may impact your super, consider speaking with an Adviser from TelstraSuper Financial Planning. To speak to an Adviser, call 1300 033 166 or request a call. 

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