Industry and retail median growth superannuation fund returns were neck and neck in October, both down -0.8 per cent following the US election, according to Chant West.
While the research house found the median growth fund (61 to 80 per cent growth assets) were down 0.7 per cent for the month, it said there was a good chance that funds would deliver a fifth consecutive calendar year return.
Over the longer term, industry funds continued to hold the advantage with returns of 5.6 per cent per annum compared to 4.8 per cent for retail funds over the 10 years to October 2016.
Chant West found despite listed share markets being the main drivers of growth fund returns, they were down in the month.
Australian shares fell 2.2 per cent, international shares were down 0.6 per cent hedged and 1.4 per cent unhedged, Australian real estate investment trusts (REITs) plummeted 7.7 per cent, and global REITs fell 4.5 per cent.
Chant West director, Warren Chant, said the most immediate concern was the outcome of the US election, while the future of global interest rates and the consequences of Brexit still preyed on investors’ minds.
“So far, stock markets around the world have, for the most part, taken Trump’s victory in their stride. Defying predictions of a major slump, shares fell as the result became clear but then reversed direction and rose strongly,” Chant said.
“However, bond markets have taken a hit, based on expectations that the Trump administration will follow through on its promises to spend significant amounts on infrastructure, and we already seen significant falls in the value of REITs and listed infrastructure.”
Chant noted that Trump’s victory left Australia and China quite vulnerable given their reliance on international trade.
“Trump has canvassed protectionist policies that, if enacted, have the potential to set off a trade war that could be damaging to both economies,” he said.
