Median growth super funds up 0.9% in February

The median growth superannuation fund (61% to 80% growth assets) was up 0.9% in February, with cumulative returns from the end of March 2020 to mid-March 2021 just under 20%, according to Chant West.

The research house’s data found that listed share markets were the main drivers of the growth fund performance. In February, Australian shares were up 1.5%, while international shares were up 2.7% in hedged terms, and 1.6% in unhedged terms. Australian and international bonds were down 3.6% and 1.6% respectively during the month.

Chant West senior investment research manager, Mano Mohankumar, said: "While there's great optimism around the rollout of vaccines and a return to some economic normality, there were some fears that a stronger than expected economic recovery may result in increased inflation and fast-tracked tightening of monetary policy. That caused investors to drive up bond yields in late February and that in turn had the effect of pulling back share markets.

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"Share markets have risen in the first half of March and, as a result, we estimate that the median growth fund is up a further 2.3% so far this month. That brings the return since the end of March last year to nearly 20%, which is remarkable given the health concerns and economic damage caused by COVID-19. It also means that we're more than 5% above the pre-COVID crisis high that was reached at the end of January 2020.”

Mohankumar noted there was more positive news in February surrounding COVID-19 in Australia and company reporting season was better than expected.

“Many more companies beat analysts’ earnings expectations than missed them,” he said.

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