Retirement
Super funds have ‘a good chance’ of finishing the year in positive territory
Retirement
Super funds have ‘a good chance’ of finishing the year in positive territory
Australian superannuation funds have crawled back the losses experienced during the COVID market crash and now have “a good chance” of finishing the calendar year in positive territory, new research has revealed.
Super funds have ‘a good chance’ of finishing the year in positive territory
Australian superannuation funds have crawled back the losses experienced during the COVID market crash and now have “a good chance” of finishing the calendar year in positive territory, new research has revealed.
Chant West has crunched the numbers revealing the median growth fund is up 0.5 per cent for the month of October.
Following growth in October, funds have now experienced six positive returns in the past seven months, with the latest stock market rally likely to see funds end November in positive territory.
Chant West senior investment research manager Mano Mohankumar told members that much of the positive growth was due to Australian shares, with international trending in the opposite direction.
“International shares, however, headed in the opposite direction due to uncertainty around the US election and surging COVID cases, particularly in the US and Europe. International shares retreated 3.2 per cent in hedged terms, but the depreciation of the Australian dollar (down from US$0.72 to US$0.70) limited that loss to 1.1 per cent in unhedged terms,” Mr Mohankumar told members.
Looking forward, the researcher explained to members that November could be a positive month due to wins on the health front as well as political stability.
“Joe Biden’s election victory has removed much of the uncertainty that was weighing on sharemarkets, although President Trump seems set on making the transition a difficult one,” he said.
“Additionally, last week the pharmaceutical company Pfizer and biotechnology company BioNTech announced that they have developed vaccines that in testing were more than 90 per cent effective in preventing COVID-19,” Mr Mohankumar explained.
While pointing out there is still a way to go before the trial is complete, sharemarkets around the world have reacted euphorically.
“We estimate that the median growth fund is up over 4.5 per cent for the month to date and up a remarkable 14 per cent since the end of March, more than erasing the 12 per cent loss experienced back in February and March
“So, with just over six weeks of 2020 remaining, we estimate that the median growth fund is up over 2 per cent for the calendar year to date,” Mr Mohankumar concluded.
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