Funds on track for super returns

SUPER funds are racing towards double-digit returns for the year after a strong March quarter delivered a 3.1 per cent gain.

The median growth fund returned 12.2 per cent for the first nine months of the year and is up more than 2.2 per cent already this month, according to research house Chant West.

Chant West senior investment research Manager Mano Mohankumar said with just 10 weeks left until the end of the financial year, a double-digit return was in sight.

He said the cumulative return since the end of March last year was about 22 per cent. “(That) is remarkable given the health concerns, disruptions and economic damage caused by COVID-19,” he said.

Fellow research house Superratings warned Australians to prepare for more volatility in sharemarkets.

“But the theme of 2021 is certainly one of ongoing recovery,” Superratings said.

As the median growth fund return climbs past 14 per cent, the market leaders are powering ahead at an even faster pace.

The $80bn Sunsuper and $48bn Hostplus are among those with growth funds sitting on 20 per cent-plus returns for the financial year to date, while the nation’s largest super fund, the $200bn Australiansuper, isn’t far off with a 19 per cent return.

“Zero interest rates and zero inflation means there’s nowhere else to put your money other than dividend-paying sharemarkets around the world,” Hostplus chief investment officer Sam Sicilia said.

Hostplus’ growth fund returned 20.4 per cent to midApril, while its balanced option is sitting at 16.3 per cent. Sunsuper’s growth option racked up a 26 per cent return by the end of March, and its balanced option 21 per cent.

Equity markets have powered much of the gains over the past year. Australian shares rose 4.2 per cent in the last the quarter, and have since climbed past 7000 points, while international shares gained more than 6 per cent over the three months through March.