With volatility and political uncertainty hitting the market hard recently, superannuation members have suffered their second straight month of negative returns.
SuperRatings’ latest data showed a decline of 3.1 per cent in October for members in median balanced options, with those in medium growth options being hit even harder with declines of 4.1 per cent for the month and -1.5 per cent for the FYTD.
Those seeking diversity by adding international equities to their Australian share options were punished, with the median international shares option declining 5.8 per cent for the month, 0.1 percentage point more than the straight Aussie option.
International options performed better for the FYTD, however, declining 1.1 per cent as opposed to 4.4 per cent for the Australian option, reflecting the divergence in domestic and international markets in recent months.
“The market rally gave way to a rolling bear market in October, and despite an attempted recovery, this month remains under significant pressure,” SuperRatings executive director, Kirby Rappell, said.
“Investors are concerned that earnings momentum is slowing and that valuations, especially in some growth sectors, are too high. Add to this significant uncertainty globally, whether it’s renewed trade tensions between China and the US or the continuing Brexit saga in the UK, and it looks like volatility will be a more permanent feature of markets heading into 2019.”