Super funds have had a slow but steady start to the 2017/18 financial year, according to Chant West.
The median growth fund – with 61-80% in growth assets – was up 0.6% for the month of August, taking the return for the first two months of 2017/18 to 0.7%.
Australians shares were up 0.7% in August. International shares were up 0.1% in hedged terms and 0.8% in unhedged terms. Listed property was up, with Australian REITs up 1.5% and global REITs up 0.3%.
“The modest start to the financial year was to be expected,” said Chant West director Warren Chant.
“The 10.8% return achieved in the year to June was something of a surprise, and it would be even more of a surprise if that is matched or beaten this year. While the economic outlook is much better than it was a year ago, both listed and unlisted assets have had a great run and most asset sectors are now fully valued or close to it,” he said.
“In August, macroeconomic data in the US was generally positive, including GDP growth for the June quarter being revised upwards from 2.6% to 3%. However, escalating tension between the US and North Korea weighed on investor sentiment, as did Hurricane Harvey which caused such damage in Texas and neighbouring states.”
“The economic data coming out of Europe remained positive. There will be much interest in the European Central Bank’s meeting later this week where it’s expected to provide some details of how it will be tapering its stimulus measures.”
“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 again kept interest rates on hold at 1.5% earlier this month, citing the continuing improvement in global economy.”
Industry and retail super funds were tied for investment returns in August, with both up 0.6%. For the Financial Year to Date industry funds are ahead 0.7%, with retail funds up 0.6%.