Superannuation funds had “solid” investment returns in the March 2017 quarter, contributing to better than expected returns for growth funds so far in the 2016/17 financial year, according to Chant West.
The median growth fund – with 61-80% in growth assets – was up 2.5% for the quarter, and up 9.5% for the first nine months of 2016/17.
Chant West says this was driven mainly by gains from equities. Australians shares were up 4.7% in the quarter. International shares were up 5.4% in hedged terms, but only up 0.9% in hedged terms due to appreciation in the Australian dollar.
Listed property fell, with Australian REITs down 0.1% and global REITs down 1.5%.
Chant West director Warren Chant said that growth funds had performed better than expected so far this financial year.
“With only the June quarter remaining, there’s a very good chance that they’ll deliver an eighth consecutive positive financial year return. This is particularly impressive given the uncertain economic and political climate we’ve seen over the past few years,” he said.
“While global economic growth remains patchy, the picture is certainly better than it was 12 months ago. US economic data continues to show improvement, and the share market has responded with solid gains.”
“In Europe, macroeconomic data released during the quarter was mainly positive but there remains some nervousness around political developments.”
“Closer to home, China’s economic growth continued to show signs of stabilising. However, US President Trump’s protectionist policies, if enacted, have the potential to set off a trade war that could be damaging.”