According to the latest figures from Chant West, the median growth fund in Australia – which holds 61 to 80 per cent of its portfolio in growth assets – took advantage of strong growth in equities market in September after a not-so-great August.
While acknowledging the improvement, Chant West’s senior investment research manager, Mano Mohankumar, downplayed optimism for continued growth, predicting that markets will remain volatile while global uncertainty remains.
“Notwithstanding the healthy overall result over the September quarter, the volatility we encountered in August isn’t going away. We expect challenging times ahead as the global economy continues to be dogged by uncertainty,” Mr Mohankumar said.
However, despite global uncertainty and low rates domestically, the research manager does not believe investors in superannuation need to worry.
“Australians should take comfort that their superannuation is mostly invested in well-diversified portfolios with their investments spread across a wide range of asset sectors,” Mr Mohankumar continued.
“With lessons learnt from the GFC, the typical growth fund is well prepared for market volatility.”
“The typical growth fund also has more resilience built in than it did a decade ago, so it is better prepared in the event that investment markets falter,” the research manager noted.
Long-term performance
Reminding investors that superannuation is a long-term asset, Mr Mohankumar did highlight how strong superannuation returns have been over the last six years.
“The healthy returns since the end of the GFC in early 2009 have seen the longer-term performance tracking well above that CPI plus 3.5 per cent target for the past six years,” he concluded.
About the author
