The annual return for a growth fund (ie. an investment option with 61-80 per cent of its portfolio allocated to growth assets) is closing in on the 15.6 per cent achieved in 2006/2007, according to Chant West director Warren Chant.
“That was the highest single year return in the past 15 years, and it could well be bettered this year,” said Mr Chant.
The recovery of the superannuation sector is “quite remarkable” given the decidedly patchy current economic environment, he said.
“April marked the 14th positive return in the past 16 months, and the median growth fund has now put on 50 per cent since the nadir reached at the end of February 2009,” he said.
Growth funds are now 10.5 per cent above their pre-global financial crisis (GFC) highs, said Mr Chant.
The results in April were largely driven by a four per cent increase in Australian shares during the month, along with a 2.7 per cent increase in international shares in hedged terms (in unhedged terms, international shares were up 3.5 per cent due to the fall in the Australian dollar).
The outperformance of listed property also contributed to April returns, with Australian and global real estate investment trusts (REITs) up 8.2 per cent and 6.2 per cent, respectively.
Balanced funds (41-60 per cent allocated to growth assets) returned 1.8 per cent in April and 11.6 per cent for the financial year to date; high-growth funds (81-100 per cent in high growth) returned 2.4 per cent for April and 18.2 per cent for the financial year to date.
Master trusts returns edged out industry funds in April with returns of 2.4 per cent versus 1.9 per cent.
“This was predictable, given their higher allocation to the high-performing sectors of shares and listed property (60 per cent versus 54 per cent for industry funds),” according to the Chant West report.
But master trusts continue to lag industry funds in the long term, according to Chant West.
For the 10 years to April, industry funds returned 7.6 per cent, while master trusts returned 6.6 per cent, according to the report.
