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Retirement

Funds continue bright start to financial year

  • September 16 2020
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Retirement

Funds continue bright start to financial year

By Cameron Micallef
September 16 2020

Super funds have continued their strong start to the financial year following a weak last quarter due to the COVID-19 pandemic, according to new research.

Funds continue bright start to financial year

Funds continue bright start to financial year

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  • September 16 2020
  • Share

Super funds have continued their strong start to the financial year following a weak last quarter due to the COVID-19 pandemic, according to new research.

Funds continue bright start to financial year

Research conducted by Chant West reveals median growth funds (61-80 per cent in growth assets) have returned 1.7 per cent for the month of August and a combined 2.7 per cent for the 2020-21 financial year.

Despite positive returns from April through to August, the sharp setback in February and March has resulted in those options that have higher allocations to growth assets generally faring worse over the past year. 

Chant West senior investment research manager Mano Mohankumar explained that funds are starting to recoup their losses.

“The median growth fund lost 12 per cent over February and March, but since then has returned an impressive 9.5 per cent on the back of the surprisingly sharp sharemarket rally,” Mr Mohankumar said.

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However, he points to growing volatility as a potential headwind for superannuation funds moving forward.

“The global economy is in recession, but we don’t know what pattern the downturn and eventual recovery will take.

“Trade tensions between the US and China continue to escalate, and of course we have the US election less than seven weeks away. Meanwhile, in Europe, the final Brexit arrangements are still up in the air.

“Despite these concerns, super fund members should take comfort in that fact that their funds generally run well diversified portfolios that have proved to be resilient in the face of external shocks,” Mr Mohankumar concluded.

Funds continue bright start to financial year
Funds continue bright start to financial year
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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