Superannuation funds had a modest start to the financial year with the median growth fund (61 to 80 per cent growth assets) rising 0.6 per cent in August thanks to Australian listed property, according to Chant West.
Chant West’s latest report found the cumulative return for the first two months of the 2017/18 financial year was 0.7 per cent.
Listed property was up, with Australian real estate investment trusts (REITs) up 1.5 per cent, and global REITs 0.3 per cent.
Listed shares yielded small positive returns for the month with Australian shares up 0.7 per cent, and international shares at 0.1 per cent on a hedged basis. The report said the depreciation of the Australian dollar (down from US$0.8 to US$0.79) increased the return to 0.8 per cent in unhedged terms.
Chant West director, Warren Chant, said: “The modest start to the financial year was to be expected. The 10.8 per cent return achieved in the year to June was something of a surprise, and it would be even more of a surprise if that is matched or beaten this year”.
“While the economic outlook is much better than it was a year ago, both listed and unlisted assets have had a great run and most asset sectors are now fully valued or close to it,” he said.
“In August, macroeconomic data in the US was generally positive, including GDP [gross domestic product] growth for the June quarter being revised upwards from 2.6 per cent to three per cent. However, escalating tension between the US and North Korea weighed on investor sentiment, as did Hurricane Harvey which caused such damage in Texas and neighbouring states.”
The report also found that industry funds and retail funds performed the same for the month of August at 0.6 per cent. However, over the medium and longer term industry funds continued to hold the advantage between 0.7 per cent and 1.3 per cent per annum.
