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.
"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.