Super funds began the new financial year on a positive note, with the median growth fund up 2.2 per cent across the months of July and August, according to Chant West.
Chant West said the growth has come off the back of strong performance in listed shares and property, which accounts for 57 per cent of the average fund’s total investments.
Chant West director Warren Chant said super funds are “continuing to deliver on their promises” where there’s some “debate over the efficiency” of the superannuation system.
“That’s because growth funds, in which most Australians have their super money, are well diversified across growth and defensive assets, traditional and alternative, in Australia and overseas, and benefit from the skills of specialised investment managers,” Mr Chant said.
“Over the 22-plus years since the introduction of compulsory super, growth funds on average have gained eight per cent per annum.
“So fund members are getting what they’ve been promised despite major setbacks such as the ‘tech wreck’ of the early 2000s and, more recently, the global financial crisis,” he said.
Mr Chant added that in August, there have been signs that the domestic economy is slowing as second quarter GDP growth came in lower than the previous quarter.
“It’s no surprise that the RBA kept the interest rate on hold at 2.5 per cent, where it has been since August 2013,” Mr Chant said.
“The market is starting to ask ‘Where to from here for earnings growth?’ and share prices have started to reflect that uncertainty.”