The first month of 2017 saw relatively flat superannuation returns, with median growth fund returns down 0.1 per cent, according to Chant West.
Mixed results for the listed shares market contributed to the flat returns, the company said, with Australian shares declining 0.8 per cent, and international shares’ 1.3 per cent hedged growth equating to a 2.4 per cent loss in unhedged terms.
“The flat result in January doesn’t come as a great surprise after the unexpectedly strong showing in 2016,” said Chant West director Warren Chant.
“The median growth fund return of 7.5 per cent for 2016 was nearly 6 per cent above inflation – That’s well above the typical long-term objective of inflation plus 3.5 per cent, and much better than what most asset managers expected.”
Mr West said political uncertainty caused by pending elections in the Netherlands, Germany and France, coupled with continued ambiguity around US policy positions would continue to weigh on markets.
“Closer to home, there were indications that China’s economic growth is stabilising, however Trump’s protectionist policies, if enacted, have the potential to set off a trade war that could be damaging,” he said.
Back in Australia, the RBA kept interest rates on hold earlier this month citing an improvement in the global economy and a pick-up in business and consumer confidence, however a further rate cut this year remains a live possibility as GDP growth remains constrained.”