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Super funds deliver moderate returns
Superannuation funds delivered a moderate performance in February, with the median balanced option posting a return of 1.1 per cent, according to SuperRatings.
The latest SuperRatings data found along with the small negative return in January, it had been a modest start to 2017, lower than what might be implied from recent market movements, including the continued reaction from equity markets to Trump’s policies.
SuperRatings chair, Jeff Bresnahan said the stability of super funds was because investors did not want to see markets getting too carried away, especially when there was still a fair amount of political and economic uncertainty globally.
The 12-month return for the median balanced option moved higher in February, and reached 11.3 per cent. This is the highest since April 2015, while the five-year return remained about nine per cent per annum.
”Looking over the past 12 months, only three months have seen negative returns, and these have been small, especially compared to the larger positive gains we saw at the end of 2016,” Bresnahan said.
“Super balances seem to be in reasonable health, so investors should not panic if we do experience bumps.”
The report found February was a mixed month on the economic front, with a boost in consumer sentiment reflected in a surge in consumer staple shares, while commodity prices continued to rise, albeit at a slower pace compared to recent months.
The research house said the quantum of labour that sought greater levels of employment was relatively high, and the dampening effect on wages could mean a rate hike from the Reserve Bank of Australia was a long way off.
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The deputy governor has warned that, as super funds’ overseas assets grow and liquidity risks rise, they will need to expand their FX hedge books to manage currency exposure effectively.
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The super fund has announced that Mark Rider will step down from his position of chief investment officer (CIO) after deciding to “semi-retire” from full-time work.
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