SuperRatings data indicated this was the fifth positive quarter in a row. According to Chant West, the previous financial year generated a 15.6 per cent return, the highest return for a single year since 1997.
Growth funds were largely allocated to shares, which performed well during the quarter. Australian shares experienced the best performance of all main asset classes in the past quarter, with a return of 10.3 per cent. According to SuperRatings, the median superannuation Australian shares option returned 2.5 per cent from the month of September.
International shares increased 6.3 per cent in hedged terms for the quarter, but due to the increase in the Australian dollar from US$0.91 to US$0.93, the unhedged terms were slightly lower at 5.3 per cent.
SuperRatings data showed the median superannuation international option rose one per cent in September. There was flat performance for Australian and global REITs, according to Chant West, with both only returning 0.1 per cent.
Chant West director Warren Chant said members would be pleased that the strength of last year has continued into the September quarter.
“The median growth fund is up 57 per cent since the GFC low point at the then end of February 2009, and now stands 16.5 per cent above its pre-GFC high achieved in October 2007,” he said.
Mr Chant said investors have been primarily focused on the United States in recent months. He said the agreement that was reached to raise the US debt ceiling prevented a US default and saw the government resume full operations after the partial shutdown lasting 16 days. The political uncertainty within Egypt and Syria had also influenced share markets, he said.
Mr Chant felt that while the European region’s GDP rose 0.3 per cent for the last quarter, ending six consecutive quarters of contraction, it was still too early to indicate if this is a sustainable recovery. The stabilising of growth in China he believed was positive for Australia because of our strong trade links.
The Reserve Bank’s interest rate cuts to the historical low of 2.5 per cent in August signaled the domestic economy still needed some additional stimulus after previous cuts failed to generate any significant improvement in activity, Mr Chant said. Profit results of the major listed companies were modest but mostly in line with expectations.
“There were indications from several industry sectors that consumer sentiment is gradually improving,” said Mr Chant.
The Chant West data indicated that the five-year return of superannuation has risen significantly due to the strong returns of the past 18 months and the GFC period gradually moving out of the calculation. According to Chant West, the five-year return has risen above the CPI plus 3.5 per cent target.
