July proves a good month for super funds
Median growth funds gained about 3 per cent in July, according to super researchers Chant West and SuperRatings. The growth reversed declines of 0.6 per cent in June.
Global sharemarkets were the strongest growth drivers for the month, with the median Australian shares option delivering 4.8 per cent compared with a rise of 5.2 per cent on the ASX 200 Accumulation Index, SuperRatings reported.
The falling Australian dollar boosted returns from overseas equities, while all other asset classes also strengthened in July.
"July's one-month return for the median balanced option is an exceptional result, especially coming on the back of last financial year's 14.7 per cent gain, the highest since the [financial crisis]," said SuperRatings founder Jeff Bresnahan.
Chant West director Warren Chant said although the median growth fund was more than 14 per cent higher than its pre-financial crisis peaks, Australian shares were 4.6 per cent behind late-October 2007 levels. Overseas shares performed only slightly better.
"This is an important reminder that the typical growth fund is not just dependent on shares for performance," Mr Chant said.
Master trusts returned 3.2 per cent for the month, in comparison with 2.9 per cent for industry funds.
"The past year has been favourable for master trusts due to their higher allocation to listed shares and property - 60 per cent against 54 per cent," Chant West said. But industry funds continued to outperform master trusts by 0.8 per cent in the longer term, with returns of an annualised 7.3 per cent against 6.5 per cent in the decade to July.
The top-performing balanced fund in five years to July was REST Core Strategy, which returned 6.9 per cent. Commonwealth Bank Group Super - Mix 70 returned 6.6 per cent while Telstra Super Corp Plus - Balanced rose 6.1 per cent.
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July was a strong month for Australian superannuation funds. Median growth funds gained about 3% in July, building on the past financial year’s gains and reversing June’s 0.6% decline, according to Chant West and SuperRatings.
Global sharemarkets were the strongest growth drivers in July, while a falling Australian dollar boosted returns from overseas equities. SuperRatings and Chant West also noted that most other asset classes strengthened during the month.
For July the median Australian shares option delivered 4.8% while the ASX 200 Accumulation Index rose about 5.2%, making Australian shares a key contributor to super fund returns, according to SuperRatings.
SuperRatings founder Jeff Bresnahan described July’s one-month return for the median balanced option as an exceptional result, coming after a 14.7% gain for the last financial year—the highest since the financial crisis.
The top-performing balanced fund over five years to July was REST Core Strategy with a 6.9% return. Commonwealth Bank Group Super – Mix 70 returned 6.6% and Telstra Super Corp Plus – Balanced returned 6.1% over the same period.
In July master trusts returned 3.2% versus 2.9% for industry funds, helped by higher allocations to listed shares and property (60% vs 54%). However, over the decade to July industry funds outperformed master trusts on an annualised basis (7.3% vs 6.5%).
Chant West noted the median growth fund was more than 14% higher than its pre-financial crisis peaks overall. However, Australian shares remained about 4.6% below late‑October 2007 levels, with overseas shares only slightly better.
Warren Chant emphasised that the typical growth fund is not just dependent on shares for performance—July’s results underline the importance of other asset classes and diversified allocations in driving super fund returns.
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