Superannuation funds' returns fell in October due to a “gradual sell off” over the month, according to SuperRatings.
The median return for super funds with balanced options – whose growth asset exposure sits between 60 per cent and 76 per cent – is “likely to be an estimated -1 per cent”, the research house said.
“While markets may have appeared remarkably calm ahead of the US election storm, a gradual sell-off in shares through October led to losses for superannuation investors,” SuperRatings said.
Volatility was “surprisingly low” in the lead up to the US election, said SuperRatings chief executive Adam Gee, though the unexpected result did contribute to fund losses through the month.
“What we saw in October was a string of small losses, which culminated in the market’s shock reaction to the election result last week, and this has led to losses for fund members,” he said.
Economic data – particularly US payroll figures – was “generally good” for the month, Mr Gee said, however expectations the US Federal Reserve (Fed) will resume its tightening also resulted in selling in both the equity and fixed income markets.
“It’s been a long time between drinks, and after the US election result it may be longer still,” he said.
“A Trump win was unexpected, and there may be more for markets to adjust to, but if economic data continues to be positive, there will be mounting pressure on the Fed to act, regardless of who occupies the White House.”
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