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Super funds headed for positive growth year
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| Warren Chant
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Superannuation funds are headed for their first year of positive growth since 2006-07, according to the latest Chant West data.
The rebound in listed markets might now slow but unlisted investments, primarily in property and infrastructure, could start to add value to the typical fund’s diversified portfolio, according to Chant West principal Warren Chant.
“The median growth fund is now up 23.8 per cent from the trough towards the end of February 2009. That’s largely on the back of a strong recovery in listed share and property markets,” Chant said.
Unlisted markets have yet to show the same recovery but in the March quarter some funds began reporting positive returns from unlisted investments, he said.
“The average growth fund now has 12 per cent of their total assets in unlisted property, unlisted infrastructure and private equity, and the percentage is much higher among industry funds than master trusts (21 per cent against 2 per cent). So if we see a return to positive performance from these unlisted assets it will help the overall performance of industry funds in particular, and perhaps provide a buffer if listed markets ease off,” he said.
The median growth fund returned 3 per cent for the month of March, which lifted the return for the March quarter to 1.8 per cent, while the return for the financial year to date was 14.7 per cent. This was the 11th time in the past 13 months that master trusts outperformed industry funds due to their higher exposure to listed shares and listed property, according to Chant West.
In the 13 months from the end of February 2009 to the end of March 2010, the median master trust rose by 29.2 per cent against 20.5 per cent for the median industry fund.
AUTHOR
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