Retail funds outperform industry funds
Retail superannuation funds outperformed industry funds after a strong start to the new financial year with the median growth fund gaining 2.7 per cent in July, according to Chant West.
Retail funds edged out over industry funds, gaining 2.8 per cent in July, compared to 2.6 per cent from its counterpart.
However, industry funds continued to hold the advantage over the longer term, having returned 7.1 per cent per annum against 5.9 per cent for retail funds over the 15 years to July 2016.
The strong July performance was thanks to a sustained rally in share markets domestically and overseas, reversing the sell-off that followed the shock Brexit vote in June, the research house said.
Australian shares surged 6.4 per cent over the month and hedged international shares rose 4.1 per cent, but due to the appreciation of the Australian dollar, the gain was reduced to two per cent in unhedged terms.
Australian listed property was also up 5.4 per cent as was global real estate investment trusts (REITs) at 5.1 per cent.
Chant West director, Warren Chant, said despite the strong performance the low-growth and high-volatility environment would likely continue.
"Investment markets have had a good run in recent years, but most assets are now fully valued or close to it so it's hard to find reliable sources of real return. That difficulty has only been compounded by the current political uncertainty, with the US election coming up in November and the consequences of Brexit still needed to play out," Chant said.
"Closer to home, there remains concern over the pace of growth of the Chinese economy even though the most recent quarterly GDP [gross domestic product] data was better than expected.
"Meanwhile, back in Australia, we saw the RBA [Reserve Bank of Australia] cut interest rates by 0.25 per cent to a new all-time low of 1.5 per cent, with further cuts this year remaining a distinct possibility."
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
