POWERED BY MOMENTUM MEDIA
Super returns off to a rough start to 2022
Super funds have had a rough start to 2022 with the median growth fund falling 2.2% in January following a lofty 13.5% bumper year in 2021, according to Chant West.
The research house’s senior investment research manager, Mano Mohankumar, said volatility had returned to investment markets in January as inflation fears, and to a lesser extent, geopolitical risks, ramped up.
Mohankumar pointed to Australian shares’ 6.5% fall over the month while international shares slid 4.9% in hedged terms as reasons for the decline. Meanwhile the Australian dollar retreated from US$0.73 to US$0.71 reduce the loss to 2.2% in unhedged terms.
As government bond yields rose, Mohankumar said, bond markets fell, with Australian and international bonds retreating 1% and 1.6%, respectively.
“While these safe haven assets were in the red, they still fell far less than share markets,” he said.
The table below compared the median performance for each of the traditional diversified risk categories in Chant West’s multi-manager survey, ranging from all growth to conservative. Over all periods shown, all risk categories have met their typical long-term return objectives, which range from CPI + 2% for conservative funds to CPI + 4.25% for all growth.
Lifecycle products
Mohankumar said that while the growth category was still where most people had their super invested, a meaningful number were now in so-called ‘lifecycle’ products.
“Most retail funds have adopted a lifecycle design for their MySuper defaults where members are allocated to an age-based option that’s progressively de-risked as that cohort gets older,” he said.
The table below accounted for the median performance for each of the retail age cohorts, together with their current median allocation to growth assets.
Long-term performance
The chart below showed that, for the majority of the time, the median growth fund exceeded its return objective over rolling 10-year periods, which was a commonly-used timeframe consistent with the long-term focus of super.
Recommended for you
Amid Australians’ growing penchant for seamless digital experiences, an industry professional believes the most successful superannuation funds will be looking to leverage technology for their members in a number of ways.
The central bank has announced its latest rate decision amid stubborn inflation and increasing geopolitical tension.
Aware Super has outlined its systematic approach to corporate engagement as institutional investors increasingly assert their influence on company boards and take on an active stewardship role.
The country’s second-largest super fund has completed its fourth SFT this past financial year and welcomes almost 5,000 new members.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI First Close USD
66.99 3 y p.a(%)
2
Hills International
59.27 3 y p.a(%)
3
Acadian Global Equity Long Short Class A
32.82 3 y p.a(%)
4
CFS FC Acadian Global Equity Long Short
32.44 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
32.01 3 y p.a(%)
Add new comment