A golden retirement gets closer as funds near double digit year
Superannuation funds look certain to post another calendar year of double digit returns and a decade of positive returns, according to industry research firm Chant West.
Retirement costs climbed in the September quarter (file photo)
With nine positive monthly returns out of 10 so far, growth funds were up 11.2 per cent for the year to date.
The funds stumbled in September, but bounced back in October with a return of 0.6 per cent.
Chant West senior investment research manager Mano Mohankumar said the strong return this year followed a better-than-expected result in 2020.
“Despite the severe downturn in February and March 2020, when markets first reacted to the COVID crisis, the median growth fund finished last calendar year up 3.6 per cent.
“A positive result for 2021 – which now looks pretty certain – would represent the 10th positive calendar year in succession.
“We’re now 19 months on from the COVID-induced low point at end-March 2020 and growth funds have returned an astonishing 29 per cent from then and now sit about 14 per cent above the pre-COVID crisis high that was reached at the end of January 2020.
“Listed share markets remain the main drivers of growth fund performance. Australian shares were virtually flat in October with a return of just 0.1 per cent.
International shares were up 5.6 per cent in hedged terms, but the appreciation of the Australian dollar over the month (from US$0.72 to US$0.75) pared that back to 1.7 per cent unhedged.
Chant West found that high growth funds had grown 14.3 per cent in the year to date, growth funds 11.2 per cent, balanced funds 8.4 per cent and conservative 4.4 per cent.
