Super funds not focused on coronavirus

SuperRatings superannuation Kirby Rappell

10 February 2020
| By Jassmyn |
image
image
expand image

Superannuation funds are not responding to the coronavirus outbreak with knee-jerk reactions, according to SuperRatings.

The research house’s latest report found the median balanced option returned 1.9% in January thanks to Australian and international shares. Despite a selloff in global shares at the start of February due to the outbreak, funds were placed to manage these types of movements, it said.

SuperRatings noted that previous outbreaks over the last two decades had resulted in short-term equity market corrections within a range of five to 15%.

It said that managing volatility was becoming increasingly necessary for funds.

Over the 12 months to the end of January, the median balanced option returned an estimated 13.8%, while the median growth option return was an estimated 16.2%. Returns over the past seven years were estimated at 8.8% and 9.8% respectively, SuperRatings data found.

SuperRatings executive director, Kirby Rappell, said: “The funds we’ve spoken to are not responding to the current market situation with knee-jerk reactions.

“They’re watching developments closely, but so far market volatility has been in line with similar risk events experienced in recent years. Fund investment strategies are generally well placed to manage these types of movements.”

Also commenting, StateWide Super chief investment officer, Con Michalakis, said: “What we can be sure about is that the economy in China and Australia will be slower due to the restrictions in place in the first quarter of 2020. However, from a long-term perspective, diversification and strategy based on member age and risk tolerance is more important.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 week 5 days ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 weeks 2 days ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

2 months 2 weeks ago

AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions. ...

1 week 2 days ago

New York-based firm CC Capital has bumped up its offer to stay ahead of rival bidder Bain Capital....

4 weeks 1 day ago

A former Insignia Financial C-suite exec has taken on a leadership role at MUFG Retirement Solutions as it announces chief executive Dee McGrath will depart after six yea...

1 week 2 days ago

TOP PERFORMING FUNDS