All balanced superannuation funds experienced a loss during the first quarter of the year, illustrating the volatility cause by the COVID-19 pandemic.
According to FE Analytics data, all 180 balanced funds recorded a loss with the best performing fund was Perpetual WealthFocus Super Diversified Real Return at a loss of 2.43%, over the three months to 31 March, 2020.
This was followed by Suncorp Brighter Super Personal Suncorp Multi-Manager Balanced and Suncorp Bright Super Business Suncorp Multi-Manager Balanced both at a loss of 3.65%, AMP Signature MySuper Macquarie Balanced Growth at a loss of 3.77%, and AMP SignatureSuper Macquarie Balanced Growth at a loss of 3.87%.
The balanced sector average was a loss of 8.46%.
According to the Perpetual fund’s latest factsheet, the fund’s key drivers of returns in February were the negative contribution of global and domestic equity markets.
“While global equity stock selection contributed to performance, Australian equity stock selection detracted as undervalued sectors such as materials, energy and consumer cyclicals underperformed,” it said.
It noted that the performance of the fund’s positions in global equity options offset a significant portion of the negative equity returns.
“Defensive assets performed well generally, with Australian duration and US dollar exposures contributing,” Perpetual said.
“The fund’s other foreign exchange positions also performed well as the Australian dollar continued its decline.”
It said the fund was positioned to maintain participation in any rally in equities and credit markets but the portfolio retained strong defensive qualities to mitigate against various risks.
These risks included value and quality bias in equity allocations, optionality in Australian and US equities that would lower the weight of equities in the event of a sell-off, and its significant cash position and substantial foreign exchange exposure.
The fund’s largest sector weighting was to cash and enhanced cash at 36.5%, followed by global equities (developed markets) at 12.3%, Australian bonds at 7.8%, market neutral equities at 7.2%, and Australian shares at 7%.
Best performing balanced super funds v sector during Q1 2020
Source: FE Analytics