Early estimates suggest that the median growth fund will post a return of about 10 per cent for the year to June 30.
This result dramatically contrasts with that of a year, where media returns of negative 13 per cent we being reported – the worst result since the introduction of compulsory super in 1992.
Principal of Chant West Warren Chant believes that the results demonstrate that good things come to those who wait, however he conceded that “some members will be smiling more than others” as not all funds benefited from the recovery.
“Patience does bring rewards, and even the most dire situations like the depths of the GFC do eventually pass.
“Despite the slide in May and June, this was a year when it paid to be invested in conventional listed assets like shares and property.”
The recovery of listed share and property markets has facilitated the return to fortune of the retail master trusts that have greater exposure to these markets.
Mr. Chant said that the ‘cellar dwellers’ of 08/09 are set to be among the strongest performers of this financial year.
the growth options of Colonial First State, Aviva, BT, MLC and AMP are all placed in this year’s top ten – the opposite end of the spectrum to where they were placed a year ago. Asset Super is this year the only industry fund placed within the top ten.
Share markets – the main drivers of diversified growth fund performance – generated strong returns as the global economy has started making tentative baby steps towards recovery.
The Australian share market has risen 13.1 per cent, while listed property recorded strong positive growth of 18.7 per cent.
However, Chant stressed that the markets remain highly volatile, and that the outlook for the coming financial year remains uncertain.
“A lot of doubts crept in during the quarter just ended, with markets reacting sharply to any hint of bad news.
“After a strong 2009/10 and given the current concerns surrounding the European debt crisis and question marks about global economic growth, members should expect a more modest return in the year ahead.”