Our first Annual Member Meeting addressed some important issues for members, scroll down to view Paul Clitheroe AM & Jonathan Armitage discussing the below issues in more detail.
We’ve shared some of the highlights for you to watch at your leisure.
Keynote speaker, Paul Clitheroe AM, shares valuable advice about managing money throughout your lifetime - plus the key mindsets that help successful investors cope with market downturns, control their spending and manage life’s changes and challenges.
8 minute video
Transcript (PDF, 57KB)
Chief Investment Officer Jonathan Armitage, discusses MLC’s investment approach during the COVID crisis and looks at the investment outlook for 2021.
6 minute video
Transcript (PDF, 40KB)
During the Q&A session, we addressed questions submitted by members. Here's the most popular.
We've seen an astonishing period for markets, particularly equity markets, in 2020 with the sort of dramatic falls in both February, March, and then unprecedented responses both from central banks in terms of reducing interest rates and also asset purchases and then also from governments, particularly through fiscal policy. And a very good example is the JobKeeper program here in Australia.
And what those sorts of investments have done is very much stabilise or cushion that very dramatic impact that the pandemic had on economic activity. And as those programmes came through, you saw a very strong rebound both in equity markets, but also in fixed-income markets. And so as we move into 2021, you are continuing to see that sort of government support and central bank support being a very important component in terms of keeping economic activity going.
I think as we look forward, there are going to be a couple of important things to examine. Overall, I think we're cautiously optimistic about the growth prospects for global economies. The things that we are going to be particularly focused on is the rollout of vaccines. We've obviously seen, in the last week or so, the start of the rollout both in the United Kingdom and the US. And an important thing to monitor is the efficacy of that vaccine rollout and the way that it will transmit back into helping economic activity get back to some more normal levels.
One of the other things that is going to be, obviously, crucial as we look into 2021 is the potential withdrawal of some of the stimulus measures that I mentioned earlier. And there's going to be a fine balancing act both for central banks and also governments to work through as you see economic activity return to normal levels, but also seeing those support measures being rolled back. But overall, we think there are grounds to be cautiously optimistic, particularly given that I think we've now got a series of vaccines which are going to be available probably earlier than we anticipated when we first entered the-- first saw the pandemic erupt earlier this year.
It is correct that on the 1st of December, we introduced a trustee levy of 0.02% across all products within the MLC Super Fund. And the levy was put in place to cover existing government levies, including replacing the current APRA levy of 0.01%. In addition, the levy was put in place to cover the cost that the trustee incurs in running the MLC Superannuation Fund. This is part of a broader number of changes that we've made across our pricing over the past couple of years and has sought us to ensure that we had contemporary, competitively priced products that enabled us to continue to run the fund sustainably and compliantly.
The word "transition" is really important in there. We consider climate change two ways, from both an asset allocation perspective and also in how we assess our managers. In terms of asset allocation, we incorporate modelling of different climate change scenarios and the impact that this might have on different industries, countries, and companies, indeed, because each circumstance will be different. Some will be more reliant on fossil fuel, some less so, some more on renewables.
Then the next thing is that we look closely at what our managers are doing, our underlying investment managers. We look at how they think about and how they analyse climate change risks in the companies that they invest in and the companies that they choose not to invest in. The MLC investment teams also continuously looking at how they can evolve our thinking about what's clearly a very important issue to all of us and how it impacts our portfolios.
First key point, I think, is that your situation is looked after by the trustee. And any decisions around how your superannuation is managed and your investment arrangements and your insurance arrangements and the like are decisions which can only be made by the trustee.
So just as, at the moment, the current shareholder, MLC Wealth, the NAB group, cannot direct the trustee as to how your superannuation interests are managed, so too, will it be the case that under new ownership with IOOF no key decisions impacting your superannuation can be made unless the trustee is actually comfortable that they're in your interests. So our role as trustee is to, first and foremost, absolutely prioritise members' interests. And if there's any distinction or any possible conflict between the interests of members and the shareholder, our statutory responsibility is to prioritise members' interests.
In the longer term, we actually expect that the IOOF transaction will potentially be quite beneficial to members, not the least of which because of scale benefits. With the larger-scale benefit, economies of scale flowing through into fee structures, we would expect that to be beneficial.
The transaction itself is subject to regulatory approvals, both through the ACCC, which actually came through this week, and by APRA. Now, APRA is the prudential regulator. The key thing they'll be looking at is whether change of control is in members' interests. So they, too, are looking at exactly the same issue. And in turn, they'll actually be looking to the trustee to seek comfort that we're satisfied that that is also the case. So there's lots of checks and balances to make sure that members' interests are being covered.
So that's a broad overview. There's, obviously more detail which we can cover on different dimensions. But the trustee is basically the one looking after your superannuation interests, investment insurance, and the like.
It’s a very important question. I think if we look at things purely from an economic perspective, China's the world's second-largest economy and growing at a very significant rate. And I think that very strong growth profile, particularly compared to other major developed economies, is obviously something that's important and worthwhile us paying a lot of attention to.
It's also a very dynamic economy. We've seen within, really, the last decade quite a strong shift away from an economy that was very resource-intensive to one where services in particular and also consumption have been an increasingly important part of the growth dynamic in that part of the world.
China is also a very important trading partner for Australia, which is, obviously, seeing some challenges in the short term. But when we look at the impact here domestically in terms of not just around raw materials but also the goods and services that are traded between the two economies, it's obviously an area that deserves an awful lot of attention. We continue to see that there are attractive investment opportunities within China.
I think it's important to note that we apply the same ESG-- so Environmental, Social, and Governance-- policies to China, as we do any of the other markets that we invest in. And so there's obviously a strong focus on making sure that any investments that we have in that part of the world are ones that we continue to, first of all, see abide by the policy that Kathryn outlined, but also we see as being sustainable over the medium to long term to make sure that we're providing the best long-term returns for you as our members of the super fund.
Group Executive Retirement and Investment Solutions, Tim Steele, discusses the MLC/IOOF transaction and how MLC is helping members rebuild their super savings as we move into a post-pandemic world.
5 minute video Transcript (PDF, 24KB)
Throughout 2020, MLC worked with a range of communities. Sometimes that meant helping them cope with the impact of COVID. Sometimes that work involved helping people secure financial independence. And for others it was all about living out childhood dreams of sporting glory.
2 minute video Transcript (PDF, 15KB)
Watch every minute of the 2-hour Annual Member Meeting, including a panel discussion where MLC executives and NULIS board members answer dozens of member questions – live.
2 hour & 2 minute video Transcript (PDF, 234KB)
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