Global volatility in March could set the median balanced growth super fund back to where it was at the start of 2011, but returns are still well in the positive for the financial year to date, according to SuperRatings.
Growth of just over 1 per cent in February had put returns at close to 10 per cent for the financial year so far, although events in Japan and the Middle East have created volatility in stock markets that will reduce this, SuperRatings found.
This volatility could see the median growth fund drop as much as 2 per cent for the month, led by a 4 per cent fall in the Australian share market. A fully hedged international shares option would have lost 5 per cent but falls in the Australian dollar mean an unhedged global equities option would have lost only 1 per cent, according to SuperRatings.
Defensive funds will fare better in the month with the median capital stable fund down no more than 0.5 per cent, benefiting from a flight to safe haven assets such as US, German and Australian government bonds.
Markets have regained some confidence in the past few days and although volatility will remain high fund managers expected markets to continue their recovery and are seeing the current environment as an opportunity to buy quality shares at attractive prices, SuperRatings stated.
The early year gains have seen rolling three year returns climb higher into positive territory, although the median balanced fund is still slightly behind October 2007 highs.
REST Super’s core strategy option was the best performed balanced option over the past five year, returning 5.5 per cent per annum compound returns, ahead of OSF Super and Buss(Q), SuperRatings stated.
