Superannuation funds have been boosted by another positive month on the Australian share market, despite natural disasters in Japan and political upheaval in the Middle East and North Africa.
According to Chant West, the median growth fund returned an average of 0.4 per cent in March, bringing the cumulative return for the financial year to date to a healthy 10.1 per cent.
Chant West director Warren Chant said the positive March result was much better than was expected midway through the month when global political and environmental concerns put a dampener on sentiment.
“What we saw is that, while natural disasters and political upheavals do have an immediate effect on sentiment, the market’s focus always comes back to economics,” Chant said.
“It was the positive economic data coming out of Europe and the United States that sparked the rebound in share markets over the second half of the month.”
But it was not all positive news for growth assets during March, with international shares retreating 1.4 per cent in hedged terms and 2.6 per cent in unhedged terms, due to the soaring Australian dollar.
Property securities were also down, with Australian and global real estate investment trusts (REITs) falling 1.9 per cent and 0.7 per cent respectively.
Chant said that while there were increasing signs of recovery in Europe and the US, the global economy is still patchy.
For Australia, the region’s growth looks to be sustainable according to Chant, but China’s growth, inflation and fiscal policy remain key areas to watch.
