Sunsuper shining bright

QUEENSLAND based Sunsuper is on track to be one of the country’s top superannuation performers over the past financial year, boosted by investments in emerging markets.

With a week before the end of the financial year, the Sunsuper for Life Balanced fund has achieved a 12.2 per cent return so far, according to SuperRatings data which was released yesterday.

That was topped only by the performance of the HOSTPLUS Balanced and First State Super Growth funds, which had growth of 12.4 per cent and 12.3 per cent respectively.

Brisbane-based Cbus also made the top 10 with its growth fund reporting a return of 11.7 per cent over the past year.

SuperRatings chairman Jeff Bresnahan said global shares had been big drivers of superannuation returns over the past year, helped by a lower Australian dollar. A lower dollar helps boost returns overseas when converted to the local currency.

“Market momentum has been strong and in the US and

Europe we are still seeing markets pushing to record levels,” Mr Bresnahan said. “Australian markets have benefited from this momentum but recently we have seen a notice- able pullback, hardest hit.”

The ASX 200 on Wednesday suffered its worst session for the year as plunging global oil prices hit energy and mining stocks. The benchmark has gained 9.3 per cent since June 30 last year.

“Whether super funds can crack double digits this financial year could depend on how Australian shares perform this final week,” said Mr Bresnahan.

Sunsuper chief investment officer Ian Patrick said the fund’s performance had been with banks the result of a variety of investment decisions rather than just one strategy.

“We don’t like to put all our eggs in one basket so there has been a myriad of reasons for the return,” Mr Patrick said.

He said the fund was “overweight” in emerging market, taking advantage of good valuations and growth in countries like Korea, Taiwan and India.

Overweight is a situation where an investment portfolio holds an excess amount of a particular investment when compared to benchmark portfolios.

Sunsuper was relatively “underweight” in terms of Australian equities, with the stock market being challenged by some subdued performances in both the financial and mining sectors.

Chant West director Warren Chant said that with the end of the financial year imminent, the median return for growth funds is sitting at just under 11 per cent.

“So it’s certain that they’ll finish the year in the black for the eighth consecutive time – and quite possibly in the double digits,” Mr Chant said.