POWERED BY MOMENTUM MEDIA
Super funds dip in October after solid Sept quarter
Despite getting off to a solid start in the 2018/19 financial year, with the median growth superannuation fund returning 2.1 per cent for the September quarter, share market jitters have driven the median growth fund down about 2.3 per cent so far in October, Chant West said.
Over the September quarter, share markets around the world gained ground. Australian shares were up 1.5 per cent, while international shares gained 5.4 per cent in hedged terms and an even more impressive 7.4 per cent in unhedged terms, resulting from the decline in the Australian dollar, Chant West.
Listed property also had a solid quarter with Australian and international property trust gaining 2 per cent and 0.3 per cent, respectively, it said.
However, Chant West senior investment research manager Mano Mohankumar said while the September quarter was solid, early October brought corrections in both domestic and global share markets.
“These falls don’t come as a surprise as investment markets have had such a strong run over the past nine years, so most asset sectors were fully valued or close to it,” he said.
Mohankumar said that how fund members react to the negative headlines is important.
“Older people approaching retirement are naturally more likely to be concerned about seeing their balances go down than people in their 20s or 30s. However, they also tend to be more conservatively invested. We estimate that conservative funds (21 to 40 per cent in growth assets) are only down 0.9 per cent over October to date,” he said.
“We encourage members to check that the investment option they’re in is suitable for them and, if so, to remain patient, think long term and not get distracted by short-term volatility.
“Trying to time the market by moving into a more conservative option can be detrimental because not only do you crystallise your losses, but you also risk missing out on the subsequent rebound when markets recover.”
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
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
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
