Impressive start for super fund returns in 2020, up 1.9% in January

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Investment returns for superannuation funds are off to an “impressive start” in 2020, returning 1.9% for the month of January, says Chant West.

Following from a “stellar” 2019 – which saw the median growth fund returning 14.7% – super funds have recorded a strong start to the 2020 calendar year.

According to Chant West, the median growth fund – which has 61-80% invested in growth assets – is up 1.9% for January, and 1.5% so far for February.

These returns were driven, in part, by domestic shares, with Australian shares up 4.9% for the month and international shares up 4.3% unhedged for currency – due to a depreciation in the Australian dollar – but down 0.4% when hedged. Australian REITs were up 6.3%, while international ones were up 1.3%.

Chant West senior investment research manager Mano Mohankumar said: “In January, while the domestic share market was strong, global share markets slowed amid mounting fears over the spread of the coronavirus. This resulted in a flight to safely, pushing domestic and global bonds up 2.3% and 1.8%, respectively. Global investors seem to have regained their confidence in February, with both Australian and global share markets recording gains so far.”

“So the year has started positively despite some lingering uncertainties. The biggest unknown is the potential spread of the coronavirus and what that might mean in economic terms. Travel and tourism-related businesses are already feeling the effects, as are others with strong trade links to China such as health food exporters. Investors are now weighing up which other sectors may suffer if the contagion continues. Australia is in the forefront here, because not only is China a major export market, it also supplies many parts and finished goods that Australian businesses rely on.”

Zenith buys Chant West

On Tuesday it was announced that the Chant West superannuation and consultancy business was being purchased from its ASX listed owner by investment research provider Zenith.

David Wright, the CEO of Zenith, said: “We’re very pleased to welcome the Chant West team and client capabilities into the Zenith business. This is a logical fit for our growth plans to better serve an expanded client base with unbiased research, consultancy and online tools, especially at a time when the broader super, pension and advice markets are undergoing considerable change and further evolving how they serve their clients and members.”

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