Retreating dollar helps super returns
The weakening in the Australian dollar may help many Australian superannuation funds end the financial year with double-digit returns, according to ratings and research house Chant West.
Chant West principal Warren Chant said the weakening Australian dollar had served to boost returns from international shares — something which had offset a less-than-stellar performance from domestic equities over recent months.
The median growth fund (61 to 80 per cent allocation to growth assets) was up 0.7 per cent for the month of May, shrugging off a 4.5 per cent fall in the Australian share market and bringing the return for the 11 months of the financial year-to-date to 16.3 per cent.
"Typically, growth funds have about 25 per cent to 30 per cent of their money invested in international shares, and the majority of the currency exposure is left unhedged," he said.
"So when the Australian dollar falls, as it has recently, the value of those shares increases in Australian dollar terms."
AUTHOR
Staff Writer
Recommended for you
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
Online investment adviser and fund manager Stockspot has introduced Stockspot Super, Australia’s first 'ETF only' superannuation product. superannuation product.
ASIC has called on superannuation funds to improve their oversight of advice fee deductions following an investigation of 10 trustees that found $990 million was charged in one year.
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.
