Share market volatility undermines returns

Sliding share markets in February have undermined an otherwise promising start to 2018 by Australian superannuation funds, according to the latest data from Chant West.

The Chant West data pointed to the fact that while the median growth fund (61 to 80 per cent growth assets) returned 0.8 per cent in January, bringing year to date financial year returns to a health 6.7 per cent, the picture had changed in early February.

It said that the median growth fund was down about 1.1 per cent so far this month.

Commenting on research, Chant West senior investment research manager, Mano Mohankumar said that the falls in domestic and global share markets recorded so far in January would not have come as a shock to asset managers who had been viewing investment markets as fully valued.

VIEW ALL

View all

“It’s at times like that the benefits of diversification come to the fore,” he said. “Growth fund performance isn’t driven by listed share and property markets alone. On average, they invest about 55 per cent in those markets so that leaves 45 per cent spread across a wide range of areas.”

The Chant West data pointed to industry funds outperforming retail funds in January, positing a return of 0.9 per cent versus 0.7 per cent for retail funds.