In spite of recent market volatility, superannuation funds recovered slightly in October, with median growth funds up 3.2 per cent, says Chant West.
In the absence of political and economic surprises in October, according to Chant West, Australian shares were up 4.4 per cent, with international hedged shares up 8.0 per cent, resulting in a 3.2 per cent return for median growth funds.
“With the end of the year in sight, there remains a good chance that the median growth fund will produce another positive calendar year return," Chant West director Warren Chant said.
“While it won’t reach the heights of the past three years (12.8 per cent in 2012; 17.2 per cent in 2013; and 8.5 per cent in 2014), it would still represent the sixth positive return in the past seven years and the eleventh in the past thirteen,” said Mr Chant.
Mr Chant pointed out that a “modest positive year” should not come as a surprise to super funds or investors.
“[Asset managers] believe that many asset sectors are now close to being fully valued, and they say they’re finding it harder to identify future sources of growth,” he said.
Meanwhile, SuperRatings indicated that median returns for the financial year to date sit at 1.3 per cent.
“With no let-up to ongoing financial volatility, super funds will continue to face challenging market conditions in the short term. Diversification will be a crucial factor in protecting super fund balances,” SuperRatings founder Jeff Bresnahan said.
SuperRatings reported that the median balanced option return for calendar 2015 to date is 5.5 per cent, slightly below the 5.7 per cent at this time last year, but well below the 13.7 per cent to date in 2013.
When it comes to long-term performance, the median balanced option has provided an annual average return of 6.2 per cent per annum over the past 10 years and 8.6 per cent over the past five years.
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