SMSF investment underperformance costing $13,000 per fund

SMSF investment underperformance is costing each fund around $13,000 over the past year, according to SuperGuard 360.

SuperGuard 360 compares the performance of SMSFs, based on reporting asset holdings, to the investment strategies of MySuper super funds. It found that returns, before fees and taxes, for SMSFs were 6.6% at the end of April 2018. If SMSFs had invested as MySuper products it is estimated they would have returned 7.8%.

This 1.2% less in investment returns is estimated to cost $8 billion across the sector, or $13,000 per SMSF. Read more...

Super funds heading for ninth consecutive year of positive returns

Super funds had a “strong” April, following a flat March quarter, setting them up for a ninth consecutive year of positive returns according to Chant West.

The ‘median growth fund’, with 61-80% in growth assets, was up 1.7% for the month of April, taking the returns for the first ten months of the financial year to a “healthy” 7.4%.

“With the cumulative return over the first ten months of the 2018 financial year sitting at 7.4% and markets also up in May so far, growth funds appear certain to finish the year in positive territory for the ninth consecutive time,” said Chant West senior investment research manager Mano Mohankumar. Read more...

SMSF returns lag MySuper returns by 2.0% in year to March 2018

SMSF returns for the year to March 2018 were 2.0% lower than if they had invested the same as MySuper products.

SMSF returns for the period were 5.4% compared to 7.4% for default MySuper products, according to indices compiled by SuperGuard 360.

SuperGuard 360 calculates two indices to compare the return an SMSF would receive if investing as per the SMSF asset allocations in ATO statistics – the SG360 SMSF reference index – and the returns an SMSF would receive if they invested the same as the typical APRA-regulated MySuper product – the SG360 default index. Read more...

Diversification leaves super fund returns flat, despite share market falls

Superannuation fund returns were flat in the March quarter, despite recent share market volatility.

The median growth super fund – 61-80% invested in growth assets – returned 0% for the March quarter, according to Chant West. This is despite Australian shares falling 3.8% over the quarter.

“The March quarter provided another great example of the benefits of diversification,” said Chant West senior investment research manager Mano Mohankumar.

“Most listed share and property markets fell, but growth funds typically only have about 55% of their members’ money invested in these sectors. By diversifying across other sectors such as unlisted infrastructure, unlisted property, bonds and cash, which all rose, they managed to smooth out the bumps and produce a flat return for the quarter.” Read more...

Super fund returns remain healthy, despite setback in February

Superannuation fund investment returns remain health for the 2017/18 financial year, despite “sharp losses” in early February, says research firm Chant West.

The median growth fund – with 61-80% invested in growth assets – recovered later in February to end the month down 0.2%. This still leaves the return for the 2017/18 year so far at a “healthy” 6.5%.

Australian shares were up 0.3% in February. Currency-hedged international shares were down 3.6% for the month, but in unhedged terms they were only down 0.4% due to a lower Australian dollar. Chant West says that growth funds hold around 70% of their international shares unhedged, “so they benefited greatly from currency movements in February”. Australian REITs were down 3.2% and global ones fell 6.1%. Read more...

Super funds “roller-coaster” start to 2018, up in Jan, down so far in Feb

Superannuation fund investment returns have had a “roller-coaster” start to 2018, says research firm Chant West.

Super fund returns had a strong 2017 and had a good start to 2018, said the firm, with the ‘median growth fund’ – 61-80% in growth assets – up 0.8% in January. This took returns over the first seven months of 2017/18 to 6.7%.

However this has changed in February, with the median growth fund down about 1.1% so far this month.

Returns on shares in January were “mixed”, with Australian shares down 0.4% and international shares up 3.9% in hedged terms (1.8% unhedged). Read more...

2017 a “stellar year” for super fund investment returns: Chant West

Against expectations, 2017 was a “stellar year” for superannuation fund investment returns, says Chant West.

The median growth fund, with 61% – 80% in growth assets, was up 10.8% for the year according to the firm, well ahead of performance targets.

“Growth funds have now delivered six straight positive calendar year returns, averaging over 10% a year. The last time we saw such a long sequence of positive returns was between 1995 and 2001,” said Chant West founder Warren Chant.

“The 2017 return of 10.8% is the best result since 2013 when funds surged 17.2%. It is also more than 5% ahead of the typical long-term return objective for that category which is CPI + 3.5%. With inflation running at about 2%, that translates to a target of about 5.5%.” Read more...

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

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%. Read more...

Super funds within sight of double digit 2017 returns

Superannuation funds are within sight of double digit investment returns for the 2017 calendar year.

According to Chant West a “surge” in returns in October could see super funds pass 10% returns for the year, with returns over the first ten months at a “very healthy” 8.6%.

The median growth fund, with 61-80% in growth assets, gained 2.3% in October. This was largely driven by the share markers, with Australian shares up 4% and international shares up 4.3% in unhedged terms and 2.5% in hedged terms. Australian REITs were up 2.2% and international ones up 0.2%. Read more...

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. Read more...