Trump election impacts super returns
The election of Donald Trump as the next President of the US has impacted superannuation returns, according to research and ratings house, SuperRatings.
The SuperRatings analysis said that 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.
It said this meant that the median balanced option return for October was likely to be an estimated minus one per cent, with shares and bonds both contributing to falls in portfolios.
Commenting on the outcome, SuperRatings chief executive, Adam Gee said volatility had been surprisingly low ahead of the US presidential election, which had become the geopolitical event to watch after Brexit.
"But 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.
Looking at the calendar year returns, the SuperRatings data pointed to an estimated median Balanced Option return of 3.5 per cent for the year to 31 October and noted that volatility had continued, with four out of the 10 months being negative and one being flat.
"The calendar year has been challenging for super investors with global uncertainty higher than that seen for many years, given the US election and Brexit results over the year." Gee said. "While 10-year returns are not quite hitting their CPI plus 3.5 per cent target, medium-term returns continue to sit well above these targets, reflecting the strong performance of funds generally."
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