Retirement
How did your super go this year?
With two weeks to go for the calendar year, it is predicted that superannuation fund members in a median growth fund will see their nest egg grow by 14.5 per cent.
How did your super go this year?
With two weeks to go for the calendar year, it is predicted that superannuation fund members in a median growth fund will see their nest egg grow by 14.5 per cent.
Chant West’s numbers showed gains of 1.9 per cent for November, leading to the 10th positive calendar year in the past 11.
“It has been a tremendous year for super funds, with the median growth fund return on pace to finish in the mid-teens,” Chant West senior investment research manager Mano Mohankumar said.
“That’s a much better result than what we could have expected at the start of the year and a major turnaround from a year ago when growth funds lost 4.6 per cent in the December 2018 quarter and investor sentiment was decidedly negative.”
The research manager warned members that the superannuation industry is facing strong headwinds in 2020.
“They need to understand that the strong returns they’ve experienced over the past decade aren’t sustainable over the long term, and they should expect more modest returns ahead.
“With record-low interest rates and low inflation, asset prices have risen to levels that are at or approaching full valuation,” Mr Mohankumar said.
However, Mr Mohankumar believes fund managers are well versed for economic downturns, which should cushion against some of the potential headwinds the industry is facing.
“Whatever the outlook, Australians should take comfort that their superannuation is generally invested in well-diversified portfolios, with investments spread across a wide range of asset sectors.
“The typical growth fund has more resilience built in than it did a decade ago, so it is better positioned to weather a period of investment market weakness if that eventuates,” Mr Mohankumar concluded.
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