Remarkable Returns from Equity Markets Drive Superannuation Fund Returns in FY21
2020-21 (FY21) Financial Year COVD-19, lockdowns and vaccinations could not deter the Australian financial market from posting another solid year and providing members of superannuation funds with stellar returns. As we reflect on the financial year, the month of June 2021 is the twelfth month in a row we have seen positive results for the median balanced fund and double-digit returns for the year ending 30 June 2021.
As in past years, markets had to contend with a range of geopolitical issues, some new while others like Brexit were all too familiar. The US Presidential election in November 2020 was a major focus for markets. The strong performance of the US economy at the beginning of the year was expected to favour the incumbent President Trump. However, the economic damage caused by COVID-19 and the indifferent and inadequate response by the Trump administration to the worsening health crisis enabled the Democratic nominee Joe Biden to win the Presidency with most Electoral College votes.
The Brexit saga continued to unfold through the year. After securing parliamentary agreement early in 2020 for the withdrawal, the terms of Britain’s exit from the EU were finally agreed between Brussels and London and ratified just days before the 31 December deadline. While the agreement means there will be no tariffs or quotas imposed on trade between Britain and the EU from 1 January 2021, the terms of the 1,200+ page agreement which cover living, working, trade and a multitude of issues between them are complex and may present unexpected challenges ahead.