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Still a long climb back to high water mark
Super continued its strong financial year performance in February, but setbacks caused by market volatility in March means funds still have a long way to go to claw their way back to 2007 high water marks, according to Chant West.
The median growth fund has posted a cumulative return of 31.5 per cent since the markets bottomed, but will need a further 5 per cent from the end of February, a month that delivered 1.2 per cent growth on the back of strong local and global share performance.
This meant the median growth fund was up 9.6 per cent for the financial year, Chant West found.
“While this is good news, we’ve seen share markets retreat sharply in March. Initially that was due to the political instability in the Middle East and North Africa, but now we’ve also had the tragedy unfolding in Japan, which is weighing heavily on investor sentiment,” said Chant West director, Warren Chant.
Chant did not believe this would have a significant economic impact over the medium to longer term despite the immediate effect on investor confidence.
“Meanwhile, the end of February marked two years from when the markets bottomed. Australian and international share markets are still more than 20 per cent off their peaks, and listed property markets are even further back,” he said.
“So funds still face an uphill battle to get back to their pre-GFC levels — even those that are well diversified into unlisted assets.”
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