Stats released by Chant West showed that the median growth fund (61 to 80 per cent in growth assets) returned up to 0.9 per cent in the month of February, despite the market selling down their technology-based assets.
This took total returns from the end of March 2020 to mid-March 2021 to just under 20 per cent, albeit following falls of 12.5 per cent in February 2020.
February 2021’s return was dampened by the global tech sell-off, with markets reducing their exposure to the major winners during the pandemic for value stocks.
“While there’s great optimism around the rollout of vaccines and a return to some economic normality, there were some fears that a stronger-than-expected economic recovery may result in increased inflation and fast-tracked tightening of monetary policy,” Chant West senior investment research manager Mano Mohankumar said.
According to the researcher, Australian shares still ended the month up 1.5 per cent, while international shares advanced 2.7 per cent in hedged terms. Unhedged, the gain was reduced to 1.6 per cent.
With sharemarkets rising further in the first half of March, Chant West estimates the median growth fund is up a further 2.3 per cent so far this month.
“That brings the return since the end of March last year to nearly 20 per cent, which is remarkable given the health concerns and economic damage caused by COVID-19,” Mr Mohankumar explained.
“It also means that we’re more than 5 per cent above the pre-COVID crisis high that was reached at the end of January 2020.”
The superannuation expert highlighted that the long-term performance in the superannuation sector still remains above its long-term targets.
“Since the introduction of compulsory super in 1992, the median growth fund has returned 8.1 per cent per annum.”
“Even looking at the past 20 years, which now includes three major sharemarket downturns – the ‘tech wreck’ in 2001–2003, the GFC in 2007–2009 and now COVID-19 – the median growth fund has returned 6.6 per cent pa, which is still well ahead of the typical return objective,” Mr Mohankumar concluded.
About the author
