How much could super funds return in 2023?

With the calendar year end fast approaching, Chant West has shared how much it is expecting the median growth super fund to return.

Over the full year, it expects the median growth fund (those with 61 to 80 per cent growth assets) to return 6.5 per cent.

Since the start of January, the median growth fund has returned 3.7 per cent so far and by 4.3 per cent over the past 12 months. 

Looking at other investment options, the High Growth option (81 to 95 per cent growth assets) has gained 4.6 per cent over the calendar year to date and by 5.2 per cent over the last 12 months. The Balanced option (41 to 60 per cent growth assets) is up by 3.1 per cent and 3.7 per cent respectively.

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During October, the median growth option fell by 1.5 per cent as share and bond markets both fell amid concern around interest rates. This was the second consecutive month it had reported losses after falling by 1.9 per cent in September and funds have suffered in the new financial year with all investment options reporting losses since 1 July 2023.

Chant West senior investment research manager, Mano Mohankumar, said: “The tragic events in the Middle East also weighed on markets in October. Over the month, Australian shares fell 3.8 per cent while developed market international shares fell 2.6 per cent in hedged terms. 

“However, the depreciation of the Australian dollar against all major currencies reduced the loss in unhedged terms to just -1 per cent and super funds, on average, have about 70 per cent of their international shares exposure unhedged. Emerging markets shares were down 2 per cent for the month. Australian bonds fell 1.8 per cent while international bonds fell 0.8 per cent, as bond yields rose again during October.”