Which balanced funds have suffered the most since COVID-19?

The worst-performing balanced superannuation funds lost between 12.5% and 13.8% during Q1 as COVID-19 rocked markets, according to data.

FE Analytics data found the fund that suffered the most since the start of the COVID-19 pandemic was ANZ Smart Choice Super Legg Mason Diversified at a loss of 13.8%. This was compared to the balanced super sector average loss of 8.5%.

The fund had its largest allocation towards Australian equities (31.9%), followed by US equities (13.2%), money market (11.9%), Australian fixed interest (7.3%), and Australian corporate fixed interest (7.07%).

The ANZ fund was followed by Zurich Superannuation Bond Managed at a loss of 12.58%, Zurich NZI Superannuation Bond Australian (Managed) at a loss of 12.57%, OnePath Integra Super Schroders Balanced at a loss of 12.55%, and ANZ Smart Choice Super OptiMix Balanced at a loss of 12.51%.

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OnePath Integra Super Schroders’ factsheet at the end of January said it had added Chinese equities at the beginning of January due to improving fundamentals and removal of geopolitical risk but it had also reduced its Yen position in favour of the US dollar.

“However, as news of the coronavirus unfolded, we’ve added 0.25 years of duration as protection, bringing overall portfolio duration to two years, as well as reducing our allocation to high yield credit by 1% given the tight spreads across credit markets,” it said.

“At the time of writing, developed equity markets are already back within a hair’s breadth of their all-time highs and credit spreads have resumed their tightening. We will use this as an opportunity to reduce risk while we wait and see how the shutdown of the world’s second-largest economy affects global growth.

“While we believe the impact will likely be transitory, we look for a better entry point to re-risk, which will likely occur when the first impact of the virus shows up in the economic data. Ultimately the stimulus from China should be supportive, but we prefer to stay defensive for now.”

Worst-performing balanced super funds v sector during Q1 2020

Source: FE Analytics

Over the three and five years to 31 March, 2020, the sector average was still better than all the five funds that had the history.  

The fund that performed the best of three, five, and 10 years was Zurich Superannuation Bond Managed. It only beat the sector average over 10 years at 64.2%, compared to 57.8%.

Returns over three, five, and 10 years to 31 March 2020

Source: FE Analytics