Brexit to hit super returns
Fallout from Britain’s shock vote to leave the European Union last week is likely to affect the returns of Australian super funds for members.
According to Chant West data obtained by the Australian Financial Review, a few of the 62 super funds surveyed are even expected to post a lost for members for the financial ending tomorrow.
In the lead up to the referendum, all of the funds expected to deliver an annual return of 2 per cent.
But in the aftermath of the Brexit vote which resulted in the worst day for stock markets around the world last Friday since the global financial crisis, the estimated average return has fallen by more than 25 per cent to 1.4 per cent.
Investment performance from growth-category super funds for the 2016 financial year will produce returns ranging from losses of 1.5 per cent to gains of 5 per cent. That compares to estimated gains of 1 per cent to 6.5 per cent pre-Brexit.
“The Brexit has been the biggest surprise event to hit investment markets this financial year. Those funds with a higher proportion invested in unlisted assets, and less exposure to shares and currency markets, are likely to be more resilient to the shock,” Chant West research manager Mano Mohankumar told the Australian Financial Review.
“Despite the downgraded global growth outlook and market turmoil it looks likely that the super sector will still manage to eke out a seventh consecutive year of average gains for members in the 2016 financial year.”
by Leon Gettler, June 29th 2016
