Super Funds Post Seventh Monthly Loss From The Last Eight
Australian Superannuation funds had another bad month in February posting their seventh losing month in the last eight.
Declining Equity markets were the main reason with the Australian stock market shedding 4.6 per cent of its value during February whilst international equities declined by 9.1 per cent whilst unhedged international equity positions posted double digit losses. Falling equity markets were chiefly to blame, with Australian shares losing 4.6 per cent during February. International shares lost 9.1 per cent on a hedged basis and 10.8 per cent if unhedged.
Analysts have drawn the obvious conclusion that super funds with any significant exposure to equities have posted negative returns.
A survey by superannuation research and consultancy firm, Chant West found the median return was a negative 4 per cent last month for growth funds with a 61 to 80 per cent allocation to assets such as shares and property. These funds form more than half of all super funds.
The best performers continued to be industry funds which in general invest a larger fraction of their assets under management in unlisted entities.
Chant West found that industry funds were down 17.2 per cent in the past 12 months, judged by the median, while commercial/private funds, known as master trusts, were down 25 per cent.
Over three years, industry funds are showing a negative 1.8per cent while master trusts are posting a negative 6.1 per cent.
“Industry funds continued to outperform their commercial rivals, albeit by delivering a smaller negative return. Given the weakness in listed markets, their decision to maintain higher allocations to unlisted assets has again been rewarded,” Mr Chant said.
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