Recent falls dent super recovery
The median balanced super fund grew 1 per cent in February, but global volatility in March looks set to wipe out this calendar year’s gains, according to SuperRatings.
Markets have reacted to events in Japan and the Middle East, which means the average balanced fund could drop as much as 2 per cent for the month, although prior to the March slump returns for the current financial year were up almost 10 per cent, SuperRatings found.
The drop was led by a 4 per cent fall in the Australian share market, while a fully hedged international shares option would have lost 5 per cent. Falls in the Australian dollar mean an unhedged global equities option would have lost only 1 per cent, according to SuperRatings.
Defensive funds will fare better in the month with the median capital stable fund down no more than 0.5 per cent, benefiting from a flight to safe haven assets such as US, German and Australian government bonds.
Markets have regained some confidence in the past few days, and although volatility will remain high, fund managers expect markets to continue their recovery and are seeing the current environment as an opportunity to buy quality shares at attractive prices, SuperRatings stated.
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