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US election nerves hurt super funds

AAP logoAAP 16/11/2016

Investor anxiety ahead of the US presidential election has hurt superannuation funds.

Returns on the median 'balanced' fund option are estimated to have fallen by one per cent during October, according to research provider SuperRatings. Shares and bonds contributed to the decline in portfolios.

"Volatility was surprisingly low ahead of the US presidential election," SuperRatings chief executive Adam Gee said.

"But what we saw in October was a string of small losses, which culminated in the market's shock reaction to the election result last week."

Donald Trump's upset victory caused an initial sharp slide on global financial markets, before an even stronger recovery in the following days.

October was largely a good month for economic news, with improvements in business confidence and upside surprises in US and UK growth that bolstered the case for a rate hike by the US Federal Reserve in December.

Despite this, there was steady selling in both stock and bond markets.

Super returns in the year to date have been volatile, with a fall in four months and no change in another.

Solid gains in the middle of the year have overall returns in positive territory, with the average 'balanced' super fund recording gains of 3.5 per cent. By comparison, seven-year and 10-year returns are 7.2 per cent and 4.8 per cent respectively.

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