The median growth superannuation option has begun the new financial year with a healthy 1.1 per cent return for July, hot on the heels of a 9.4 per cent return for 2017–18.
According to research by Chant West, the median growth fund (defined as between 61 per cent and 80 per cent growth assets) posted a return of 1.1 per cent for July.
The positive July return is mainly attributable to listed share markets, with international shares up 3.2 per cent on a hedged basis and 2.5 per cent unhedged.
Australian shares were up 1.3 per cent for the month, and A-REITs and international REITs gained 1 per cent and 0.9 of a percentage point, respectively.
The Chant West research also found that most retail superannuation members are now in lifecycle products, which change their asset allocation as members age depending on which decade they were born in.
Commenting on the trend, Chant West senior research manager Mano Mohankumar said a few industry funds have also adopted a lifecycle design for their default fund, which means one-third of MySuper default money is now in a lifecycle product.
“Because the de-risking takes place progressively within the investment option, it’s difficult to make direct comparisons of the performance of these age-based options with the traditional options that are based on a single risk category,” Mr Mohankumar said.
“While the general premise is the same, the not-for-profit funds have gone about it in a different way. In their model, members ‘switch’ from one risk category to another at particular ages,” he said.