Super funds have enjoyed a solid start to the new financial year, with modest growth in the September quarter and industry funds again outperforming retail funds.
According to research organisation Chant West, listed share markets had a positive September quarter gaining 1.5 per cent so far this financial year.
Highlights of the September quarter report include:
- Australian shares produced a 0.8 per cent return for the quarter
- international shares gained 4 per cent on a hedged basis
- the appreciation of the Australian dollar (up from US$0.77 to US$0.78) reduced this to 2.5 per cent in unhedged terms
- Australian and global Real Estate Investment Trusts (REITs) advanced 1.9 per cent and 1 per cent, respectively.
Industry funds outperformed retail funds in September (1 per cent versus 0.7 per cent) and over the September quarter (1.7 per cent versus 1.4 per cent). Industry funds also continue to hold the advantage over the medium and longer term, ahead by between 0.7 per cent and 1.3 per cent per annum.
Chant West has also updated its Overall Super Fund Ratings 2017, with AMP funds holding the top five spots. How does your super fund rate?
"Around the world, with a few exceptions, economic conditions continue to improve. That has been reflected in most of the major listed markets where share prices have moved higher in recent months. Australia has been slower than most in this upward trend, and our market moved very little over the September quarter, although it has lifted so far in October. The other main laggard has been the UK, still beset by uncertainty about the ramifications of Brexit,” said Chant West Director Warren Chant.
"Over the quarter, macroeconomic data in the US was generally positive, including GDP growth for the June quarter being revised upwards from 2.6 per cent to 3.1 per cent. A healthy company earnings reporting season also supported equity markets. The US Federal Reserve has indicated that another interest rate rise is likely by the end of the year.
"Economic data out of Europe also remained positive. The European Central Bank has discussed various scenarios relating to its stimulus measures but details of any further tapering measures have yet to be released. In the UK, Brexit negotiations continue to dominate news with both the political and economic outlook remaining unclear.
"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 has kept interest rates on hold at 1.5 per cent, citing the continuing improvement in the global economy."
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