Super funds have seen strong performance in all risk categories throughout the month of November, according to Chant West, paving the way for annual returns of 8.8 per cent in 2023.
The median growth fund (61–80 per cent growth assets) grew by 3.1 per cent over the month, contrasting October’s second consecutive monthly decline of 1.5 per cent.
The all growth option (96–100 per cent growth assets) saw the largest increase of 4.2 per cent in November, while the high growth option (81–95 per cent growth assets) rose by 3.5 per cent.
This was followed by the balanced option (41–60 per cent growth assets) that returned 2.6 per cent and the conservative category (21–40 per cent growth assets) reported returns of 2 per cent.
“With markets also up in December so far, Chant West estimates that with less than two weeks of the calendar year remaining, the median growth fund return is up 8.8 per cent – an excellent result under challenging circumstances,” the research firm said.
Mano Mohankumar, Chant West senior investment research manager, attributed the ‘tremendous’ calendar year-to-date return to strong sharemarkets.
Specifically, international shares were a key driver with ‘staggering’ returns of 22 per cent over the period alongside the tech sector providing healthy performance.
“While Australian shares haven’t reached the same heights this year, they’ve still delivered a solid 9.5 per cent over the same period. At a time when many Australians are feeling financial stress due to high inflation and high interest rates, the better-than-expected calendar year return will provide some good news,” he explained.
“It’s a reward for super fund members who have remained patient and maintained a long-term focus. A final result close to the 8.8 per cent estimate would more than offset the entire 2022 calendar year loss of 4.6 per cent.”
Australian shares surged by 5.1 per cent over November while international shares returned 8.4 per cent in hedged terms, Mohankumar observed.
Despite the positive results, the senior investment research manager warned that market volatility is unlikely to disappear given the uncertain environment.
“However, super fund members should take comfort in the fact that most Australians are invested in well-diversified portfolios that have their investment exposure spread across a wide range of asset classes. That diversification helps provide smoother returns during periods of market volatility,” he reassured.
