Important: Superannuation is a long-term investment. Don’t be too concerned about a negative month here or there because on average super funds have been providing positive returns for 28 of the last 33 calendar years.
Super funds built on their strong start to the new financial year with the median Growth fund (61% to 80% growth assets) up 0.8% in September, taking the return for the first three months of the financial year to a remarkable 3.6%.
What’s more, with shares continuing their strong run into October, research house Chant West estimates the median Growth fund is already up 9% this calendar year, with two-and-a-half months still to run.
International shares were the main driver of returns in September, boosted by the US tech sector and optimism about the potential of AI. Developed markets were up 3.3% hedged and 2% unhedged. Chant West Head of Super Investment Research, Mano Mohankumar says the resumption of interest rate cuts by the US Federal Reserve during the month, and solid corporate earnings, also buoyed share markets.
Emerging markets did even better, surging 5.8% unhedged, their strongest return in more than two years. Bucking the trend, Australian shares posted a small loss of 0.6% which Mohankumar attributed to expectations for interest rate cuts being scaled back in response to firmer economic data and “moderately stickier inflation”.
Bond returns were broadly positive in September, with Australian bonds up 0.1% and international bonds up 0.7%.
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