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Growth fund returns boosted by vaccine breakthroughs
COVID-19 vaccine breakthroughs have boosted share markets to help the median growth superannuation fund return 4.9% during November, according to Chant West.
Since the start of the year, funds with 61% to 80% in growth assets returned 2.6% and were set to finish the calendar year at around 3%.
Chant West senior investment research manager, Mano Mohankumar, said growth funds had made a 14.7% turnaround since the global sell-off in February and March that saw median growth funds plummet 12%.
“November’s surge in global share markets was driven mainly by reports of vaccine breakthroughs which gave investors a sense of light at the end of the tunnel and provided optimism around a return to some economic normality,” he said.
“Indeed, it was the more economically-sensitive sectors, including energy and financials, that experienced the biggest gains over the month. Additionally, Joe Biden’s US election victory removed much of the uncertainty that had been weighing on markets. In the Eurozone, infection rates fell in many countries resulting in the easing of restrictions.
“This year’s experience highlights to super fund members the importance of maintaining a long-term focus. Those who panicked and switched to cash or a more conservative option back in March would not only have crystallised losses, but as markets rebounded so sharply they would have missed out on some or all of the rebound.”
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The profit-to-member super fund’s MySuper default option has returned 9.85 per cent for the financial year 2024–25.
Colonial First State (CFS) has announced solid double-digit returns for its MySuper balanced and growth equivalent funds during the financial year.
The super fund’s Future Saver High Growth option delivered an 11.9 per cent return for the financial year 2024–25, on the back of a diversified portfolio and actively managed investment strategy.
HESTA has delivered a 10.18 per cent return for its MySuper Balanced Growth option in the 2024–25 financial year, marking the third consecutive year of returns above 9 per cent for the $80 billion industry fund’s default investment strategy.
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