Strength to strength: Super funds set to record bumper year
Superannuation funds were heading towards a strong financial year performance with further growth recorded in April, according to Chant West.
If super returns remain at current levels for the rest of the year, they would easily wipe away the losses of the previous year, which were about 3.3 per cent. (Image: Pexels)
The median growth fund, in which the majority of people invest, was up 1.2 per cent for April which brought the year-to-date performance to 8.1 per cent with only May and June results to be added.
“It looks likely that funds will finish the year with a healthy return,” Chant West said.
If the return remains at the 8.1 per cent level or increases, it would easily wipe away the losses of the previous year, which were about 3.3 per cent.
It was also well above the long-term average objective of most funds for a return of 6 per cent.
The April performance was based on strong growth in shares and bonds, according to Chant West senior investment research manager Mano Mohankumar.
“Australian shares were up 1.9 per cent over the month. International shares were up 1.6 per cent in hedged terms and that was boosted to 3.2 per cent in unhedged terms because of the depreciation of the Australian dollar over the period,” he said.
“Australian and international bonds returned 0.4 per cent and 0.3 per cent, respectively,” he said.
According to Chant West, since the introduction of compulsory super in 1992, the median growth fund has returned about 7.9 per cent a year while inflation over the same period was about 2.6 per cent.
