Master trusts trump industry funds in 2009-10

Superannuation funds returns may have been hit by adverse market conditions through April and May, but they are still destined to end the financial year in double digits, according to the latest data released by Chant West.

What is more, the nature of the recovery from the global financial crisis means that retail master trusts will have out-performed industry funds for the period.

Chant West principal Warren Chant said plunging share markets in May caused the median growth fund to record a 2.6 per cent loss. He added that it might have been even worse had it not been for the sharp decline in the value of the Australian dollar and the broad diversification of most funds’ portfolios.

However Chant said that super fund members had no need to feel despondent in circumstances where despite the negativity in May, super fund returns were still up a healthy 11.7 per cent for the financial year to date.

What is more, he said Chant West estimated the return to the end of June would be about 12.5 per cent after investment fees and tax.

Chant said that while this generally represented good news for super fund members, it would depend on which fund they were invested in because the spread of returns would be quite wide.

“In our growth category, the returns for the financial year to date range from a low of 7.4 per cent to a high of 16.1 per cent,” he said. “Several of the poorer performers from 2008-09 are among the top performers for 2009-10, which shows the perils of chopping and changing funds based on recent performance alone.”

The Chant West data indicated that on both a financial-year-to-date basis and over one year, master trusts had out-performed industry funds by an average of nearly 3 per cent and nearly 5 per cent respectively.