Retirement
‘Impressive’ super erases most COVID-19 losses
Australian superannuation has erased most of the COVID-19 downturn following a positive September quarter, new research has shown.
‘Impressive’ super erases most COVID-19 losses
Australian superannuation has erased most of the COVID-19 downturn following a positive September quarter, new research has shown.
Stats released by Chant West have shown median growth of superannuation funds, which invest 61 to 80 per cent in growth assets, is up 2 per cent for the quarter.
This is despite a shaky September, which saw the first negative monthly return for members since March.
Chant West senior investment research manager Mano Mohankumar said members benefited from diversification in their assets, much like they did when the pandemic began.
“The positive return over the September quarter was driven mainly by international shares, which returned an impressive 6.9 per cent in hedged terms,” he said.
However, the appreciation of the Australian dollar reduced gains for members to 3.8 per cent.
The researcher explained how members are back to where they were pre-COVID-19.
“After a shaky September, sharemarkets have regained momentum in October, and we estimate that the median growth fund is up 2.5 for the month to date and up an impressive 11.5 per cent since the end of March.
“So, growth funds have now erased most of the 12 per cent loss experienced back in February and March. That’s despite the uncertain global economic and political backdrop,” he said.
Mr Mohankumar also told members that superannuation being a long-term means they should focus on how the asset class performs over time.
“Even looking at the past 20 years, which now includes three sharemarket major downturns – the ‘tech wreck’ in 2001-2003, the GFC in 2007-2009 and now COVID-19 – the median growth fund has returned 6.3 per cent per annum, which is still ahead of the typical return objective,” he concluded.
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