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Eurozone crisis hurting Australian superannuation fund returns
The Australian economy is in reasonably strong but the outlook for Europe is hampering investor sentiment, according to Chant West’s latest monthly Australian superannuation performance survey.
Comparing the median performance for each category in Chant West’s multi-manager performance survey, the report found that despite the median growth fund increasing 3.1 per cent for the month ended 31 October, returns for the financial year-to-date were still negative at minus-2.4 per cent.
Similarly, while the Australian share market rose 7.2 per cent in October, unhedged investors saw their returns reduced to 0.8 per cent.
Chant West director Warren Chant said that while October saw investors rally on optimism that the Euro zone would come to a workable plan to fix the sovereign debt crisis, November saw markets level again as it became clear that there is more work to be done with European leaders.
“Now is not the time for complacency because, while we are half a world away, we are certainly not immune from events in the Euro zone,” said Chant.
As part of its review, Chant West also compared the median growth category over a rolling five-year period and the conservative category over a rolling three-year period, and found that both categories had beaten their performance objectives over the long term. However, the report also stated that the “recent period of underperformance is now the longest in the compulsory superannuation era.”
In other results, master trusts outperformed industry funds 3.8 per cent compared to 2.8 per cent for the month of October. However, results showed that industry funds continued to hold the advantage over master trusts over the long term, returning an annualised return of 5.8 per cent against 4.4 per cent over the past 10 years to date.
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