Markets: Super shares have funds flying

Chant West says those super funds that invested from 61-80 per cent of their portfolios in shares had their best year for more than a decade.

Superannuation funds, with up to 80 per cent of their investments were in stocks, averaged returns of 15.6 per cent in the 12 months to June 30 – their best performing year since 1997.

Analysis done by Chant West says the top-performing fund last year that invested between 61-80 per cent of its money in shares was a BT fund, Super for Life 1960s Lifestage, up 18.6 per cent. Even the worst performing fund, which invested a similar percentage in stocks, rose 10.2 per cent.

“Who would have thought, in the dark days of February 2009 when markets hit their low point in the wake of the global financial crisis, that the median growth fund would have recovered by over 50 per cent in little more than four years?” says Warren Chant, the founder of his eponymous firm. “It just shows how, when sentiment is at its lowest ebb, it pays to remember that markets move in cycles and can recover faster than you think.”

In the last 10 years superannuation funds that have invested up to 80 per cent of the money in stocks have had annual returns of 7 per cent, according to Chant West. Those funds that have invested between 81-100 per cent in stocks have had yearly returns of 7.1 per cent.

Those that have invested all their money in shares have had annual returns of 6.8 per cent while those that have invested 41-60 per cent in stocks have had an annual return of 6.3 per cent.