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| Garry Weaven |
The exposure of some industry funds to unlisted assets may continue to weigh down the returns they deliver to members well into the new financial year, according to research house Chant West.
In an analysis pointing to funds recording a second consecutive year of negative returns, Chant West also noted that for a third month in succession, retail master trusts had outperformed the median industry fund in May.
It said this outperformance on the part of the retail master trust had been owed to the further downward valuations of unlisted assets coupled with strong performances from listed markets.
Chant West said despite the three months of outperformance by the retail master trusts, the industry funds would still finish the full financial year in front.
“However, we are anticipating further downward valuations to take place in unlisted markets, which will have a greater impact on industry fund returns and narrow the performance gap,” the analysis said.
The Chant West assessment came after Industry Funds Management chairman Garry Weaven said on weekend television that he did not believe there would be significant further declines as a result of exposures to unlisted assets.
“If anything, I think the sharp falls have already come out of the system and there may be some reversal of that now,” he said. “There might be a small lag to the share market by unlisted assets, but now that the share market is starting to rise, this small lag may well start to produce increases in unlisted assets going forward.”
