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Industry and retail line-ball on performance
Industry funds and their retail counterparts generated similar levels of returns during the September quarter as global uncertainty and volatile investment markets created a challenging environment.
The latest data released by research and ratings house, Chant West revealed that Industry funds and retail funds performed broadly in line with each other over the September quarter, suffering losses of 1.6 per cent and 1.7 per cent, respectively.
According to Chant West principal, Warren Chant, diversification represented the key to super funds keeping returns at or near positive territory despite the September quarter challenges.
"The September quarter provided an excellent demonstration of the benefits of diversification," he said.
"While growth funds feel the pain when listed share markets fall sharply, the fact that they're also invested in a wide range of other growth and defensive assets, including alternative and unlisted assets, helps cushion the blow."
Chant said the result was that while Australian and hedged international shares both lost more than 6.5 per cent, the typical growth fund member only suffered a loss of 1.7 per cent.
The Chant West analysis said that while the Australian share market fell 6.5 per cent over the quarter, international shares had fallen even further, dropping 7.7 per cent.
It noted, however, that this was more than offset by the fall in the Australian dollar which dropped nine per cent, which was enough to turn the 7.7 per cent loss into a small 0.4 per cent gain in unhedged terms.
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3
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