Growth strategies only bright spot in dull August

Superannuation funds were unable to recapture the highs of July, with median growth superannuation fund returns hampered by poor-performing growth assets, the latest Morningstar Australian Superannuation Survey has found.

Returning an average of just 0.4 per cent over the month of August, the results for median funds ranged from a low of 0.01 to a high of 1.22 per cent.

Longer-term annualised results also dipped across the board at one year (17.2 per cent), three years (8.9 per cent), five years (4.5 per cent) and 10 years (6.7 per cent), when compared to the previous month.

The best-performing growth super funds over the past 12 months were Legg Mason Growth (27.7 per cent), Legg Mason Balanced (24.9 per cent) and Maple-Brown Abbott (21 per cent).

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Over five years, Schroders (7.1 per cent) was first, followed by REST Super Core (6.3 per cent) and REST Super Diversified (6.1 per cent).

In other performance results, BT Balanced (14.4 per cent), REST Super Balanced (14.1 per cent) and AMP Moderate (13.2 per cent) were the best performers amongst balanced options.

Despite the poor returns, growth-style Australian equity strategies were the standout performer for the month of August, easily outperforming their value counterparts as well as other growth assets, according to Morningstar's Australian Institutional Sector Survey.

The S&P Australia BMI Growth Index returned 3.2 per cent compared to the S&P Australia BMI Value Index's 1.9 per cent, with the S&P/ASX300 Index recording a 2.5 per cent return for the month and lifting returns to 8 per cent for the first two months of the financial year.

However other growth assets moved in the opposite direction with global property falling 5.5 per cent, international shares falling 1.5 percent and Australian listed property falling 0.2 percent over the month.

The median Australian share fund manager only narrowly outperformed the index, adding 0.2 per cent to the benchmark return of 2.5 per cent for the month of August which was reflected in the performance of the median growth superannuation fund.

Allocation to equities reflected the results, with growth funds holding an average of 57.7 per cent in equities while the average property exposure was 7.6 per cent and defensive assets at 24 per cent.

However long-term annualised returns were solid across all period with 26.2 per cent returns over one year, 10.7 per cent over three years and 5.7 per cent over five years.

Bennelong Concentrated, Millenium and Hyperion were the best performing Australian share strategies for the year to 31 August returning 41.2 percent, 40.4 percent and 38.2 percent respectively.

International sharemarkets also posted strong returns in Australian dollar terms for the past year. The MSCI World ex-Australia NR AUD Index posted a 36.9 per cent return and the median international share fund manager returned 37.5 per cent over one year and 13.5 per cent per annum over three years to 31 August.

Orbis, Bernstein and Wellington were the best-performing international share funds over the year, to 31 August returning 59.5 per cent, 49.7 per cent and 48.4 per cent respectively.