Master trusts are likely to outperform their industry superannuation fund counterparts by 3 per cent this financial year, according to the latest research from Chant West.
Sharemarkets have performed so strongly over the past year that master trusts, with their higher exposure of 66 per cent to listed shares and property compared to industry funds' 54 per cent allocation, are certain to finish the financial year ahead, the report said.
"With listed markets taking a battering in May, industry funds, with their higher exposure to unlisted assets, outperformed their master trust counterparts for only the third time in the past 15 months," Chant West principal Warren Chant said.
Plunging sharemarkets took their toll on superannuation fund returns in May, with the median growth fund losing 2.6 per cent for the month.
Chant said the losses would have been even worse were it not for the sharp decline in the Australian dollar and the broad diversification of most funds' portfolios.
"May was one of those months when we saw the benefits of diversification at work. Sharemarkets fell more than 7 per cent, but even the more aggressive growth funds don't commit all their money to shares," he said.
"The broad spread of investments they have in their portfolios limited the damage to 2.6 per cent on average which, while disappointing, was not a disaster.
"Despite the downturn in May, growth funds are still up a healthy 11.7 per cent for the financial year to date, and members can still look forward to the first positive financial year return since 2006/07."
