Superannuation <\/a>funds have delivered their seventh consecutive month of gains in October, Chant West says, with the median growth fund delivering 1.2% over the month. <\/p>\nThat figure brings the performance of the median growth fund, with 61% to 80% of its investments in growth assets, to 9.3% over the calendar year to date, while high growth was sitting at 10.3% and all growth at 12%.<\/p>\n
Solid yearly outcome looking likely <\/p>\n
Chant West, head of superannuation investment research, Mano Mohankumar, said that a final result near 7.8% for the full calendar year would be a good outcome, particularly given the uncertain economic and geopolitical backdrop throughout the year.<\/p>\n
As he said on Wednesday:<\/p>\n
That return is well ahead of the typical long-term return objective which translates to about 6%. Super fund members should also remember that this year’s result follows two exceptional years, with returns of 9.9% in calendar year 23 and 11.4% in calendar year 24.\u00a0Given the strength of share markets over the past three years, super fund members in higher risk portfolios have fared even better.<\/p>\n
Mr Mohankumar said that the positive October result was driven by outperformance in international shares markets, “which rose 2.6% and 3.3% in hedged and unhedged terms, respectively”.<\/p>\n
Markets were buoyed by easing of trade tensions during the month, strong corporate earnings and optimism around AI. Emerging markets shares performed even better, returning an impressive 5.5%.<\/p>\n
Australian shares finished the month in positive territory, albeit only marginally, with a return of 0.4%, while Australian and international bonds gained 0.4% and 0.7%, respectively.<\/p>\n
Good returns over the long term <\/p>\n
Mr Mohankumar said since the introduction of compulsory superannuation in July 1992, the median growth fund had returned 8% per year.<\/p>\n
The annual CPI increase over the same period is 2.7%, giving a real return of 5.3% p.a. \u2013 well above the typical 3.5% target. Even looking at the past 20 years, which includes three major share market downturns \u2013 the GFC in 2007-2009, COVID-19 in 2020, and the high inflation and rising interest rates in 2022 \u2013 super funds have returned 7.1% p.a., which is still comfortably ahead of the typical objective.<\/p>\n
While Australian equities notched up positive gains in October, the S&P\/ASX 200 Index\u00a0(ASX: XJO) has been on a downward trend in November so far, falling 4.5% from 8,881.9 points at the start of the month to 8,480 points on Wednesday morning.<\/p>\n
The Dow Jones Industrial Average Index\u00a0(DJX: .DJI) in the US is also trading below its levels at the start of the month after trading higher for the first week or so.<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Superannuation funds have delivered their seventh consecutive month of gains in October, Chant West…\n","protected":false},"author":2,"featured_media":142429,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,7162,246,111,139,69,244,245],"class_list":{"0":"post-142428","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-editors-choice","10":"tag-finance","11":"tag-new-zealand","12":"tag-newzealand","13":"tag-nz","14":"tag-personal-finance","15":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/142428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=142428"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/142428\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/142429"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=142428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=142428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=142428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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