Financial year may end in the black: Intech
Three consecutive months of positive returns for the Australian and international share sectors have given growth orientated funds some hope for a positive 2002/03 financial year, according toInTech
The group’s latest Growth Funds Survey reveals the median growth fund returned 5.8 per cent for the three months to May 2003, pushing the year to date performance back towards the black.
However, with only one month until the end of the financial year, and given that the median growth fund has returned -2.3 per cent so far, InTech does not hold too much hope of a positive result for this financial year.
“If history is any guide on what we can expect, it is more than likely that growth superannuation funds are set to experience another negative financial year,” InTech senior consultant Corrin Collocott says.
“However, it may not be to the same magnitude as the 2001/02 financial year, when the median growth fund returned -4.1 per cent,” he adds.
Based on historical data, InTech puts the chances of a monthly return of greater than 2.4 per cent, the figure needed to bring figures for the full year into the black, at just 18 per cent.
On the other hand, it puts the chances of the median growth fund returning less than the -4.1 per cent experienced for the 2001/02 financial year at around 11 per cent.
“The data we have put together suggests that almost anything is still possible, although extreme cases like returns of -4.5 per cent or five per cent for next month are less likely,” Collocott says.
The 5.8 per cent return was the largest return since the December 2001 quarter. Meanwhile, listed property, returning five per cent, was the best performing sector for May 2003 and has also outperformed all other sectors for the financial year to date, with a 15.4 per cent return across the sector.
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
