Weaker October pares super returns
Weaker domestic and international share market performances during October pared back some of the robust superannuation fund returns achieved through the first quarter of the new financial year, according to the latest data released by Intech.
The median return in the ‘Intech Growth Universe’ in October was negative 1.7 per cent reflecting a 3.9 per cent decline in the Australian equities and a 1.7 per cent decline in international equities in local currency terms.
Intech senior consultant, Andrew Korbel said the negative performance in October needed to be seen in the context of the strong recent run of monthly returns.
“The previous three months’ return was over 5.5 per cent and represented the best start to a financial year since 1993,” he said.
He said that while April and October 2005 had each seen large negative returns of around minus 1.5 per cent, the intervening five months had all been above 1.5 per cent and most had exceeded 2 per cent.
“This sort of volatility is a little unusual, but the ‘two steps forward, one step back’ pattern of returns is part and parcel of growth-oriented investing, and should deliver on funds’ expected long-term average returns when viewed over a suitable time-frame,” Korbel said.
The Intech data showed that the best performing managers in the Growth Universe over the 12 months to October 31 were BGI with 16.1 per cent, Perpetual with 15.9 per cent and AMP Balanced growth with 15.3 per cent.
AUTHOR
Mike Taylor
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