12 June 2025
This month, we caught up with the Investment Team at AustralianSuper to discuss recent market volatility and its implications for investors.
Global markets experienced significant volatility recently, largely due to geopolitical developments and US trade policies. A lack of clarity around US tariffs and their implementation raised concerns about the potential long-term impacts on the global economy. The relationship between the US and China has been a particular point of focus, as the world’s two largest economies publicly engage in trade negotiations. Some stock market indices, like the Nasdaq Composite in the US, entered bear market territory during the height of the sell-off – meaning they fell more than 20% from their recent highs in February to lows in April. All told, it resulted in a couple months of unpredictability for investors and global markets.
While the underlying reasons for recent volatility are yet to fully resolve, listed share markets largely recovered in April and May, following the recent sell-off. There have been several factors at play, but key to this reversal has been a broad walk-back in trade policy by the US administration. This included a 90-day delay for most countries’ reciprocal tariffs, as well as the gradual easing of restrictions, or outright exemptions, for some sectors. In addition, US corporate earnings delivered some better-than-expected results in the first quarter of the calendar year, bolstering US stock prices. And the Reserve Bank of Australia (RBA) cut its cash rate in May by 0.25% – to 3.85% – making it the first time in over two years that the rate has fallen below 4%. These factors have been broadly supportive of listed share markets.
The road ahead does have some uncertainty. First, it's unclear what may happen after the US’ 90-day tariff pause expires, and whether the administration will extend, amend, or walk back those policies. Additionally, there may be lagged effects from tariffs on the US and global economies, which could impact growth. Our team continues to monitor progress in trade negotiations, changes in formal policies, as well as fiscal stimulus and monetary policy responses globally. As an active investment manager, we will continue to monitor these signals, adapt to changing market conditions to manage risk for members, and invest in attractive opportunities to grow members’ super in the long term. The recent sell-off offered a reminder that volatile markets often lead to the mispricing of assets and market downturns can create buying opportunities for long-term investors like AustralianSuper.
Sponsored by AustralianSuper Pty Ltd, ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.
This information may be general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
