Shaky markets hurt super returns

Australian superannuation fund members may have seen their funds end the last financial year in double digit territory, but the outlook appears far less certain as they move further into 2010-11, according to the latest data released by Chant West.

According to the data, August returns were hit by market volatility with the result that returns within the median growth superannuation fund were 0.5 per cent lower.

Commenting on the data, Chant West principal Warren Chant said funds were experiencing a period of heightened volatility as the world economy tried to drag itself clear of the global financial crisis.

“Market sentiment is changing rapidly, almost from day to day, and there is no clear trend emerging,” he said.

Chant pointed out that the Australian share market was down 1.1 per cent in August, while international equities lost 3.4 per cent in hedged terms and 2.1 per cent in unhedged terms and Australian and global real estate investment trusts advanced by 3.5 per cent and 0.3 per cent respectively.

The share market volatility saw industry funds regain the lead in terms of returns in August, largely due to their lower exposure to listed markets.

However, Chant pointed out that this was only the sixth time in the past 18 months that the industry funds had outperformed their master trust competitors, albeit that industry funds had outperformed over the longer haul.