Super funds look certain to deliver 6th consecutive year of positive returns

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Large superannuation funds look certain to deliver a sixth consecutive calendar year of positive investment returns, with final gains possibly in double digits.

Chant West says the gain of 1.3% in November for the median growth fund, with 61-80% growth assets, has pushed the cumulative returns for calendar 2017 to 10%.

Australian shares rose 1.7% in November and international shares were up 1.6% on a hedged basis and up 3.2% in unhedged terms as the Australian dollar fell. Australian REITs were up 5.3% and global REITs up 2.4%.

“With only a handful of trading days left in 2017, it appears certain that growth funds will finish in the black for the sixth consecutive year,” said Chant West Chairman Warren Chant.

“The year to date return is sitting on 10% and December has been positive so far, so a double-digit result is in sight. That would be the best year since 2013, when we saw a remarkable 17.2% return,” he said.

“This is a surprisingly good result and it’s been driven by strong share markets, particularly overseas. We’ve been saying for some time that all asset sectors appear to be close to or fully valued. Add to that the uncertainty generated by the Trump election just over a year ago and you’d never have predicted such a strong performance. It just shows how investors have shut out the ‘noise’ and concentrated on the facts, which show a steadily improving global economy.”

Retail super funds outperformed industry funds on a monthly basis again, 1.3% to 1.2%, and are ahead over the Financial Year to Date, 5.5% to 5.3%. However industry funds outperformed over longer periods, including up 12.9% over one year, compared to 12.1% for retail funds.

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