Important: Superannuation is a long-term investment. Don’t be too concerned about a negative month here or there because on average super funds have been providing positive returns for 28 of the last 33 calendar years.
Super funds built on their strong start to the new financial year with a 1.3% return in August, with research house Chant West estimating the median Growth fund (61% to 80% growth assets) is up 3.2% over the two-and-a-half months to mid-September.
Once again, shares were the main driver. Australian shares hit a new high after jumping 3.2% in August, on a strong rebound in the resources sector. Developed market international shares rose 2.1% hedged, but just 0.9% unhedged due to the appreciation in the Australian dollar from US64c to US65c. Emerging market shares posted a small loss of 0.4% unhedged over the same period.
Chant West Head of Super Investment Research, Mano Mohankumar, says that despite ongoing uncertainty around where tariffs will land, international shares were supported by a strong US corporate reporting season and expectation of a US interest rate cut at the US Federal Reserve’s September meeting.
Bond returns were also positive, with Australian bonds up 0.3% in August and international bonds up 0.5%.
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