Australia’s major super funds posted a 2.24 per cent gain in March, driven by a “sharp bounce” in listed local and international share markets, according to a Super Ratings survey.
While the gain was “strong in real terms” it was “somewhat below expectations” given world share markets surged more than 8 per cent for the month, according to managing director Jeff Bresnahan.
“Funds appear to have been impacted by a rising dollar [for hedged positions] and the ongoing revaluations of unlisted assets,” he said.
The survey highlights that the medium-term results of super funds’ key investment options “remain sound”, he said, with only international share options recording a negative five-year median result (-2.62 per cent).
It found Australian share options rose 6.4 per cent per annum, growth options by 2.9 per cent, and balanced options by 4.07 per cent.
Bresnahan said that international shares was also found to be the option type that produced the greatest range in performance during March.
“In a number of cases (options) the strong international stock market performance was wiped out by the corresponding sharp revaluation of the Australian dollar.
“This highlights the effect different hedging strategies can have on fund performance, with options fully hedged to the Australian dollar returning up to 10 per cent and those [without possibly] losing more than 2 per cent, he said.
