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September subdued for super funds: Chant West
Nervousness and risk aversion among investors saw super funds lose ground in September compared to the first two months of the financial year, Chant West reported.
The median growth fund (61 to 80 per cent growth assets) recorded a 1.7 per cent gain for the September quarter, which Chant West called respectable.
"Fear and volatility returned to global markets in September, and that mood has only deepened in October so far," Chant West director Warren Chant said.
While investors remained "reasonably sanguine" about the economic outlook for the first two months of the financial year as they focused on the recovering US economy, they could not ignore the fact that Europe risked going back into recession and/or deflation.
Listed shares and property markets were the biggest contributors to September's growth fund performance, with Australian shares falling 0.6 per cent partly due to falling commodity prices, but also because investors are scurrying to the safety of bonds.
International shares rose 0.9 per cent in hedged terms, and 5.7 per cent in unhedged terms due to the steep decline of the Australian dollar.
Australian listed property had positive returns of 1.2 per cent, while international listed property went back 1.3 per cent.
Industry and retail funds were neck and neck in the September quarter, returning 1.7 per cent and 1.6 per cent respectively.
But over 15 years, industry funds returned an annualised 7.1 per cent, while retail funds returned 6 per cent.
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Rest Super remains “fully committed” to equities, even as it anticipates higher market volatility than experienced in previous decades.
Australian superannuation funds have again generated strong returns for FY25, with the median growth fund returning 10.5 per cent for the year, according to Chant West.
The US remains a standout destination for innovation and commercialisation, according to MLC Asset Management chief investment officer Dan Farmer.
Hostplus’ MySuper Balanced option delivered significantly stronger returns in 2024–25, bouncing back from the previous year when its cautious stance on listed markets came at a cost to members.
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