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Boost in super returns offsets December losses
While superannuation funds encountered rough waters in the 2018 December quarter, the 2019 March quarter saw skies clear, with local and international shares rebounding to bring returns for the median growth fund back up to 3.3 per cent, according to new research by Chant West.
The Chant West report found Aussie shares were up 10.9 per cent over the quarter and international shares were even stronger, with returns of 12.7 per cent in hedged terms, and the median growth fund gained six per cent.
Chant West’s senior investment manager, Mano Mohankumar, said the six per cent rise for growth funds “more than offset” the 4.6 per cent loss over the December 2018 quarter, and with the financial year return sitting at 3.3 per cent, super funds are still on track for a tenth consecutive positive financial year result.
“The V-shaped pattern experienced by share markets over the past six months provides a valuable lesson for fund members,” said Mohankumar. “The worst thing you could do after the December quarter falls would have been to switch into cash or a conservative option with a lower exposure to shares. Not only would you have locked in the losses, but you would also have missed out on the March quarter rebound.”
Mohankumar said the takeaway message for investors would be to choose an appropriate option and stick with it. But, while the March quarter was strong, the research manager said members should still exercise some caution as concerns about US trade tensions remain.
“With that, the Brexit confusion and the slowing pace of global economic growth, there are no easy pickings for asset managers,” he said.
The report showed the median growth option returned seven per cent for the year to 31 March, while the balanced returned 5.7 per cent and the conservative retuned 4.7 per cent.
The table below shows the traditional diversified fund performance across all time frames to 31 March 2019.
Source: Chant West.
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TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
