GESB funds report negative returns

The total amount of funds managed by the Government Employees Superannuation Board fell by $200 million in the past financial year as a result of the COVID-19 downturn, with the organisation's main management options reporting negative annual returns for the first time in more than a decade.

GESB chair John Langoulant said in the board's annual report that the My GESB Super option had recorded a return of -1.47 per cent in 2019-20, while the My West State Super had returned -1.01 per cent.

Mr Langoulant also warned that there was still significant uncertainty around future investment returns.

"As economies gradually open up and the potential for a vaccine or treatment improve, there is the potential for investment markets to improve," he said.

"Conversely, the possibility of future lockdowns and further COVID-19 outbreaks could see investment markets weaken. In addition, a low interest rate environment means forward-looking returns on cash investments are likely to be lower than the past.

"The year has reinforced that share markets can experience negative returns from time to time and these negative returns can be severe. On a long-term basis, however, returns remain strong and well diversified investment portfolios have generally achieved returns in line with expectations. Whilst periods of instability and uncertainty can challenge investment returns in the short to medium term, GESB’s investment strategies remain suitably diversified and appropriate for their longer-term objectives."

Overall, GESB reported a $555 million loss in 2019-20 on the back of a $1.18 billion write-down in the fair value of assets.