After finishing off 2009 on a high, the median superannuation growth fund industry average retreated 2.2% in January.
This was largely because listed share and property markets went into reverse. The Australian share market was down 6.2% for the month, while international shares retreated 2.9% (unhedged) and 3.5% (hedged). Australian and global REITs (listed property) were down 3.0% and 3.7%, respectively. Despite this disappointing start to 2010, the financial year to date return for growth funds is a healthy 10.4%.
(Growth funds are those with a 61 to 80% allocation to growth assets and they are the default option for most members.)
Chant West principal, Warren Chant, says: “The markets were probably due for a breather after running up so strongly towards the end of 2009. We had a strong ‘Christmas rally’, which was unlikely to be sustained into the New Year.
“January again highlights the importance of diversification. The growth funds in our survey have, on average, a 73% exposure to growth assets and 27% exposure to defensive assets. But the growth assets aren’t limited to listed shares and property that are subject to the ‘greed and fear’ of market forces. Most of the major funds now have a diverse investment mix, including unlisted infrastructure, opportunistic property,
