The median growth fund (61–80 per cent in growth assets) rose 0.3 per cent in August, after it dipped 0.6 per cent in the first two weeks of the month on the back of significant market turbulence.
The return for the option over the first two months of financial year 2024–25 is now at around 2.3 per cent.
Meanwhile, the median balanced fund (41–60 per cent growth assets) was also up 0.3 per cent, while the conservative option (21–40 per cent in growth assets) rose 0.5 per cent.
The high growth option (81–95 per cent in growth assets) added 0.2 per cent, while the all-growth option (96–100 per cent in growth assets) was the only one to suffer a loss of 0.3 per cent during August.
Chant West senior investment research manager Mano Mohankumar reflected on the market turbulence in early August, saying that: “Markets rebounded quite quickly as economic data released later in the month was more reassuring, coupled with US Fed Chair, Jerome Powell, stating that the ’time has come’ for interest rate cuts.”
Both Australian and international shares finished the month of August in positive territory.
“Over the full month, international shares were up 1.9 per cent in hedged terms, but the appreciation of the Australian dollar (up from US$0.65 to US$0.68) turned that into a loss of 1.2 per cent in unhedged terms,” Mohankumar said, adding that on average, some 70 per cent of super funds’ international share exposure is unhedged.
“Australian shares finished the month in positive territory with a small gain of 0.4 per cent. Bond markets were also up over the month as bond yields fell with Australian and international bonds up 1.2 per cent and 1 per cent, respectively.”
According to Mohankumar, the significant market jitters in August serve as another reminder of the benefits of diversification across a range of asset classes. Moreover, he highlighted the importance of maintaining a long-term focus and not getting distracted by short-term noise.
