After a tumultuous finish to 2015/16, super funds got off to a strong start in the new financial year with the median growth fund (61 to 80% allocation to growth assets) gaining 2.7% in July.
Key highlights include:
. The strong performance in July was mainly the result of a sustained rally in share markets at home and overseas, reversing the sell-off that followed the shock ‘Brexit’ result in the UK in late June.
. July was an excellent month, but we need to remember we’re still in a low growth / higher volatility environment and this is likely to continue for some time.
. Investment markets have had a good run in recent years, but most assets are now fully valued or close to it so it’s hard to find reliable sources of real return. That difficulty has only been compounded by the current political uncertainty, with the US election coming up in November and the consequences of ‘Brexit’ still to play out.
. Retail funds slightly outperformed industry funds in July, returning 2.8% versus 2.6%.
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