Growth super funds experience 11 months of growth

Superannuation funds have started strong this financial year, with the median growth fund (61% to 80% in growth assets) going up by 1.7% in August, according to Chant West.

Chant West senior investment research manager, Mano Mohankumar, said funds continued to benefit from the ongoing share market rally.

"The main drivers of growth fund performance are listed shares and they were up again in August,” Mohankumar said.

“Australian shares rose 2.6% over the month while international shares advanced 2.7% in hedged terms and 3.1% unhedged.”

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Mohankumar said the rally experienced since the COVID-19 induced low point at the end of March last year propelled growth fund performance by 29%.

“Not only have we recovered all the losses incurred in the early COVID-19 period, but we’re now sitting about 14% above the pre-COVID crisis high that was reached at the end of January 2020. And that has all occurred while the pandemic continues to cause massive disruptions to lives and economies,” he said.

Globally, share markets were encouraged in August by a speech from US Federal Reserve chair, Jerome Powell, which provided reassurance that the Fed's policy efforts were likely to continue to support share markets, according to Mohankumar.

That overshadowed concerns in the US about the damage caused by Hurricane Ida and the increased spread of the COVID-19 Delta variant.

In Europe, share markets advanced on the back of a solid earnings reporting season, the ongoing economic recovery as well as their vaccine take up while China saw a flat share market due to concerns around increased regulation.

"Back at home, more than half the population remains in some form of lockdown, with NSW and Victoria struggling to contain the spread of the Delta variant,” Mohankumar said.

“However, vaccine rollouts across the country gained significant momentum over the past month.”