Widespread sell-offs in the share and property markets meant super funds dropped significantly in February. According to super research house Chant West the median growth fund (61-80% in growth assets) fell 3.1% in February and has dropped a further 10.5% in March to date. High volatility means this figure is fluctuating considerably every day.
In February, Australian shares fell 7.8%, unhedged international shares dropped 4.9%, Australian REITs fell 5.1% and global REITs fell 8.1%. Australian and global bonds provided some cushioning – up 0.9% and 1.2% respectively.
ChantWest senior investment research manager, Mano Mohankumar said: “The rapid spread of the virus and fears over its impact on the global economy have ravaged share markets over the past three weeks. That has fed through to the performance of super funds, though perhaps not to the extent that some people have feared.”
“Growth funds, which is where most Australians have their superannuation invested, hold diversified portfolios that are spread across a wide range of growth and defensive asset sectors. This diversification works to cushion the blow during periods of share market weakness. So while Australian and international shares are down at least 27% since the end of January, the median growth fund’s loss has been limited to about 13%.”
“This is still a material reduction in account balances, but it comes on the back of the tremendous run funds have had since the end of the GFC. From the GFC low point in early 2009 to the end of January 2020, the median growth fund averaged a staggering 9.3% per annum – well ahead of the typical long-term objective of 5.5% to 6% per annum. The current sell-off has obviously eaten into that long-term average gain, but funds are still performing well ahead of their objectives since the end of the GFC.”
The following table shows the super performance across various timeframes for five investment categories.
Super fund performance (Results to 29 February 2020)
| Fund Category|
(% Growth Assets)
| 1 mth|
| 3 mths|
| 1 yr|
| 3 yrs|
| 5 yrs|
| 7 yrs|
| 10 yrs|
| 15 yrs|
Source: Chant West
If you’re interested in the monthly performance for super funds over 5 investment options going back to January 2016, see the SuperGuide monthly super fund performance Reckoner.
If you’re interested in the performance of lifecycle super funds (including their latest returns), see the SuperGuide article What are lifecycle super funds, and how do they perform?
Learn more about super fund performance in the following SuperGuide articles:
- What are lifecycle super funds, and how do they perform?
- Monthly super fund performance Reckoner: Monthly returns for 5 investment categories
- Super fund performance over 27 calendar years (to December 2019)
- Annual super fund performance Reckoner: Annual returns for 5 investment categories
- Super fund performance over 27 financial years (to June 2019)
- Superannuation funds: Does size really matter?
- Fund Performance: SMSFs vs APRA super funds
To learn about super investing strategies, see the following SuperGuide articles: