Barring a shock collapse in world sharemarkets, superannuation fund members can look forward to a positive return this financial year – the first time since 2006/07. And it is looking increasingly likely that the return will be in the double digits, given that the median Growth fund is already up 14.7% for the nine months to the end of March.
Chant West principal, Warren Chant, believes that the rebound in listed markets may slow from here on, but that unlisted investments, primarily in property and infrastructure, may soon start to add value to the typical fund’s diversified portfolio.
“The median Growth fund is now up 23.8% from the trough towards the end of February 2009. That’s largely on the back of a strong recovery in listed share and property markets. Those markets still have a little way to go to reach their pre-crisis levels, but the general consensus is that the ‘easy money’ has now been made” Mr Chant said.
In March, for the 11th time in the past 13 months, master trusts outperformed industry funds over the month, due to their higher exposure to listed shares and listed property (66% versus 54%). In the 13 months from the end of February 2009 to the end of March 2010, the median master trust rose by 29.2% against 20.5% for the median industry fund.
“The average growth fund now has 12% of their total assets in unlisted property, unlisted infrastructure and private equity, and the percentage is much higher among industry funds than master trusts (21% against 2%). So if we see a return to positive performance from these unlisted assets it will help the overall performance of industry funds in particular.” Mr Chant said.
