Global shares drive super fund returns for Q1 2017/18

World share markets have been driving recent superannuation fund investment returns.

The median growth fund, with 61-80% in growth assets, was up 0.9% for the month of September and up 1.5% for the first quarter of 2017/18, according to Chant West.

Australian shares were up 0.8% for the quarter. International shares were up 4% on a hedged basis, but up only 2.5% unhedged due to appreciation in the Australian dollar. Australian REITs were up 1.9% and global ones up 1%.

“Around the world, with a few exceptions, economic conditions continue to improve,” said Chant West director, Warren Chant.

“That has been reflected in most of the major listed markets where share prices have moved higher in recent months. Australia has been slower than most in this upward trend, and our market moved very little over the September quarter, although it has lifted so far in October,” he said.

“Over the quarter, macroeconomic data in the US was generally positive, including GDP growth for the June quarter being revised upwards from 2.6% to 3.1%. A healthy company earnings reporting season also supported equity markets. The US Federal Reserve has indicated that another interest rate rise is likely by the end of the year.”

“Economic data out of Europe also remained positive. The European Central Bank has discussed various scenarios relating to its stimulus measures but details of any further tapering measures have yet to be released. In the UK, Brexit negotiations continue to dominate news with both the political and economic outlook remaining unclear.”

“In the Asia Pacific, the Chinese economy continues to show signs of improvement which is good news for Australia given our strong trade links. Back home, the RBA has kept interest rates on hold at 1.5%, citing the continuing improvement in the global economy.”

Industry super funds outperformed retail super funds 1.0% to 0.7% in September, taking their performance so far in this financial year to 1.7% and 1.4% respectively.

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