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September subdued for super funds: Chant West
Nervousness and risk aversion among investors saw super funds lose ground in September compared to the first two months of the financial year, Chant West reported.
The median growth fund (61 to 80 per cent growth assets) recorded a 1.7 per cent gain for the September quarter, which Chant West called respectable.
"Fear and volatility returned to global markets in September, and that mood has only deepened in October so far," Chant West director Warren Chant said.
While investors remained "reasonably sanguine" about the economic outlook for the first two months of the financial year as they focused on the recovering US economy, they could not ignore the fact that Europe risked going back into recession and/or deflation.
Listed shares and property markets were the biggest contributors to September's growth fund performance, with Australian shares falling 0.6 per cent partly due to falling commodity prices, but also because investors are scurrying to the safety of bonds.
International shares rose 0.9 per cent in hedged terms, and 5.7 per cent in unhedged terms due to the steep decline of the Australian dollar.
Australian listed property had positive returns of 1.2 per cent, while international listed property went back 1.3 per cent.
Industry and retail funds were neck and neck in the September quarter, returning 1.7 per cent and 1.6 per cent respectively.
But over 15 years, industry funds returned an annualised 7.1 per cent, while retail funds returned 6 per cent.
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The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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