After averaging 11% per annum over the past four years, super funds look set to deliver a fifth consecutive positive calendar year return. A gain of 1.1% in November propelled the median growth fund (61 to 80% growth assets) to a cumulative 5% for the first 11 months of 2016. And with share markets continuing to rise in December, the median return for the year currently stands at an estimated 6.3%.
Key highlights include:
• With less than two weeks of the year remaining, it’s almost certain the median growth fund will deliver another positive return to follow up the 12.8% recorded in 2012, 17.2% in 2013, 8.5% in 2014 and 5.7% in 2015. It would represent the seventh positive calendar year return in the past eight years and the twelfth in the past fourteen.
• In November, the shock US presidential election victory by Donald Trump dominated headlines. Trump’s victory brings with it uncertainty, but share markets around the world have focused on his plans to stimulate the economy.
• Last week, the US Federal Reserve finally raised its benchmark interest rate by 25 basis points to a range of 0.50 to 0.75%. This was widely expected, but the surprise was that the Fed also went as far as to forecast three further rate rises over 2017.
• Industry funds edged out retail funds in November returning 1.2% (versus 1.1% for retail funds).
