Super funds are off to a disappointing start in 2016 on the back of sharp falls in share markets worldwide. The median growth fund (61 to 80% allocation to growth assets) retreated 2.3% in January, and has continued to slide further into the red in February.
Key highlights include:
• Growth funds typically only have about 55% of their assets in listed shares and REITs. These funds are diversified across a wide range of other assets as well, including alternative and unlisted assets that are far less volatile. This means that during periods of sharemarket turmoil, they’re able to cushion the blow.
• It’s also important to put things in perspective. Growth funds have just come off four consecutive years of positive returns averaging 11% per annum.
• We encourage super fund members to remain patient and not panic. Moving into a more conservative investment option now would not only crystalise your losses but you may miss out on the benefits of any subsequent rebound.
• Industry funds outperformed retail funds in January with a return of -2% versus -2.6%.
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