After surging in July, super funds delivered a more modest gain in August with the median growth fund (61 to 80% allocation to growth assets) rising 0.3%. This brings the cumulative return for the first two months of the 2016/17 financial year to 3%.
Key highlights include:
• We had two straight positive months to open this financial year, but the past couple of weeks have seen markets become more jittery amid growing expectations of a further interest rate hike in the US, so some of those earlier gains have been given back.
• This nervous mood is likely to continue while there’s still uncertainty about global interest rates, the outcome of the US election and the consequences of Brexit, among other concerns. Most asset sectors are now fully valued or close to it, so it’s hard to find reliable sources of real return.
• Industry funds slightly outperformed retail funds in August, returning 0.4% versus 0.2%.
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