Tremendous fund returns kick off 2025 in optimistic | Australian Markets
Superannuation fund returns have kicked off 2025 in solidly optimistic territory, based on the latest evaluation from Chant West.
The specialist superannuation analysis and scores home stated the median growth fund (61% to 80% growth belongings) have been up 2.2% in January after attaining a median consequence of 11.4% final financial yr.
Commenting on the consequence, Chant West senior investment analysis supervisor, Mano Mohankumar stated the January consequence had been pushed by sturdy home and worldwide share markets which, in combination, had accounted for about 55% of the standard growth option.
“In terms of international shares, Europe led the way in January with the US lagging most developed regions. Donald Trump officially took over as President for his second stint in mid-January and sentiment in the US continued to be buoyed by his ‘America First’ policy agenda,” Mohankumar stated.
“Nonetheless, his tariff threats shook markets on the finish of the month. In late January, we additionally noticed the US tech sector take a hit on the back of claims that Chinese language start-up, DeepSeek, had educated its generative AI functionality to supply outcomes corresponding to the market leaders at a fraction of the associated fee.
“Over the full month, developed international shares returned 3.4% and 2.7% in hedged and unhedged terms, respectively. Australian shares fared even better, surging 4.5% given its low weighting to AI-related companies and higher exposure to financials. The ongoing tariff threats weighed on emerging markets shares which underperformed developed markets with a return of 1%. Bond markets were relatively flat with Australian and international returning 0.2% and 0.4%, respectively.”
Mohankumar famous that checked out over the long time period, superannuation fund efficiency remained above goal.
“Since the introduction of compulsory super in July 1992, the median growth fund has returned 8% p.a. The annual CPI increase over the same period is 2.6%, giving a real return of 5.4% p.a. – well above the typical 3.5% target. Even looking at the past 20 years, which includes three major share market downturns – the GFC in 2007-2009, COVID-19 in 2020, and the high inflation and rising interest rates in 2022 – super funds have returned 7.2% p.a., which is still comfortably ahead of the typical objective.”
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