The median growth superannuation fund gained a solid 3.1 per cent over the September quarter on the back of listed share markets, according to Chant West.
Australian shares gained 5.2 per cent during the quarter while international shares were up 4.8 per cent on a hedged basis, but due to a stronger Australian dollar, the return in unhedged terms was at two per cent.
The research house found listed property had mixed results, with Australian real estate investment trusts (REITs) down 1.9 per cent over the quarter and global REITs up 1.3 per cent.
Chant West director, Warren Chant, said: “This was a solid quarter overall but the performance was far from consistent. Of the 3.1 per cent gain, 2.7 per cent was achieved in July. Since then we’ve had two months of fairly flat returns, and that’s mainly because investors are preoccupied about US interest rates and when the next rate hike will be”.
Chant said the nervous mood was likely to continue thanks to uncertainty about global interest rates, the outcome of the US election, and the downstream consequences of Brexit.
“Funds are finding it hard to identify undervalued assets that will deliver real returns, and this is compounded by the pressure they’re under to reduce investment fees. They’re going to find it tough to meet their long-term objectives, and members need to remain patient in the face of returns that are likely to be lower than what they’re used to,” he said.
“Closer to home, there remains concern over the pace of growth of the Chinese economy where further monetary easing is expected. Meanwhile, back in Australia, the RBA kept interest rates on hold at 1.5 per cent, with a further cut this year remaining a possibility.”
Chant West also found industry funds outperformed retail funds over the quarter, returning 3.2 per cent over 2.9 per cent. Industry funds also continued to hold the advantage over the longer term with a return of 5.8 per cent per annum, against 5.1 per cent for funds over the 10 years to September 2016.
