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Growth fund returns boosted by vaccine breakthroughs
COVID-19 vaccine breakthroughs have boosted share markets to help the median growth superannuation fund return 4.9% during November, according to Chant West.
Since the start of the year, funds with 61% to 80% in growth assets returned 2.6% and were set to finish the calendar year at around 3%.
Chant West senior investment research manager, Mano Mohankumar, said growth funds had made a 14.7% turnaround since the global sell-off in February and March that saw median growth funds plummet 12%.
“November’s surge in global share markets was driven mainly by reports of vaccine breakthroughs which gave investors a sense of light at the end of the tunnel and provided optimism around a return to some economic normality,” he said.
“Indeed, it was the more economically-sensitive sectors, including energy and financials, that experienced the biggest gains over the month. Additionally, Joe Biden’s US election victory removed much of the uncertainty that had been weighing on markets. In the Eurozone, infection rates fell in many countries resulting in the easing of restrictions.
“This year’s experience highlights to super fund members the importance of maintaining a long-term focus. Those who panicked and switched to cash or a more conservative option back in March would not only have crystallised losses, but as markets rebounded so sharply they would have missed out on some or all of the rebound.”
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The super fund announced that Gregory has been appointed to its executive leadership team, taking on the fresh role of chief advice officer.
The deputy governor has warned that, as super funds’ overseas assets grow and liquidity risks rise, they will need to expand their FX hedge books to manage currency exposure effectively.
Super funds have built on early financial year momentum, as growth funds deliver strong results driven by equities and resilient bonds.
The super fund has announced that Mark Rider will step down from his position of chief investment officer (CIO) after deciding to “semi-retire” from full-time work.
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