Industry funds are maintaining a performance lead over their commercial master trust competitors but the gap is continuing to narrow, according to figures from Chant West.
In its latest monthly report, published yesterday, research firm Chant West says that because of their higher weighting to listed shares, master trusts slightly outperformed industry funds in October and over the past year. Industry funds maintain a higher weighting to unlisted assets.
But over the long term – 10 years to October – industry funds have delivered an average outperformance of 1.2 per cent a year after investment fees and tax but before administration fees or adviser commissions. Many master trusts still have embedded adviser commissions, although these are being phased out.
Master trusts returned 1.5 per cent for the month of October, 7.2 per cent for the year to October, minus 3.5 per cent for three years, 3.3 per cent for five years, 5.9 per cent for seven years and 4.5 per cent for 10 years.
Industry funds returned 1.4 per cent for October, 7.0 per cent for the year, minus 2.7 per cent for three years, 4.3 per cent for five years, 6.9 per cent for seven years and 5.7 per cent for 10 years.
Warren Chant, director of the firm, said that in the calendar year to date, growth options for industry funds and master trusts had shown five positive months and five negative months.
“Where we go from here is uncertain,” he said. “Markets are still highly volatile and we’re getting used to seeing movements of one per cent or more, up or down, in a day. Governments are still pumping money into the system and until this period of artificial stimulus is over we really can’t tell if the global economy is back on track for sustainable growth.”