Super funds, after the 2.3% return disaster in the 2016 financial year, did well in the September quarter, with the the median growth fund returning 3.1% .
Equity markets, the main drivers of growth fund returns, had a strong quarter. Australian shares gained 5.2% while international shares were up 4.8%.
“This was a solid quarter overall but the performance was far from consistent,” says Warren Chant of industry analysts Chant West.
Most of the quarterly gain, about 2.7%, was in July.
“Since then we’ve had two months of fairly flat returns, and that’s mainly because investors are preoccupied about US interest rates and when the next rate hike will be,” Chant says.
“This nervous mood is likely to continue while there’s so much uncertainty about global interest rates, the outcome of the US election and the downstream consequences of Brexit.”
Chant says funds are finding it hard to identify undervalued assets to deliver real returns.
“Members need to remain patient in the face of returns that are likely to be lower than what they’re used to,” he says.
This chart compares returns from the median growth fund to the consumer price index: