POWERED BY MOMENTUM MEDIA
Super funds need ability to down-side risk
Two super research houses have found super funds in August suffered significant losses thanks to concerns over China.
Chant West's report found the poor performance outweighed the gains in July, so the overall return for the first two months of the 2015/16 financial year was negative at -0.6 per cent.
SuperRatings said August was one of the toughest months funds had seen since the Global Financial Crisis as the median balanced option fell 2.9 per cent.
Both houses found Australian and international shares suffered losses, as did listed property, with Australia and global REITs down four and 5.9 per cent respectively.
Chant West director, Warren Chant, said "it's when we experience a month like August that we see the benefits of diversification in play."
"The people who are most concerned about their accounts going backwards are those approaching retirement. In many cases, however, either as a result of their own actions or because of the way their fund is designed, by that stage they will be invested in a lower risk option," he said.
"For them, the performance of our conservative category median will be more relevant. This category, which has a lower allocation to listed shares, had its loss in August limited to just 1.1 per cent."
SuperRatings founder, Jeff Bresnahan, said "On the back of concerns about China's growth prospects, falls across major stock markets have made August one of the toughest months for superannuation funds since the Global Financial Crisis"
"With further market volatility expected and ongoing concerns over global economic growth in the coming year, superannuation funds' ability to manage down-side risk will be crucial going forward," Besnahan said.
Recommended for you
Australia’s largest superannuation fund has confirmed all members who had funds stolen during the recent cyber fraud crime have been reimbursed.
As institutional investors grapple with shifting sentiment towards US equities and fresh uncertainty surrounding tariffs, Australia’s Aware Super is sticking to a disciplined, diversified playbook.
Market volatility continued to weigh on fund returns last month, with persistent uncertainty making it difficult to pinpoint how returns will fare in April.
The Association of Superannuation Funds of Australia (ASFA) has called for the incoming government to prioritise “certainty and stability” when it comes to super policy.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
90.28 3 y p.a(%)
2
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.44 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
