Super set to post a shocker

Super members are at risk of their first annual loss since 2011, after recording a third consecutive month of negative returns in November, as market volatility continues to test global markets.

The latest data from superannuation research house SuperRatings reveals a negative return of -0.6 per cent in November for members invested in the median balanced option. This follows a decline in October of -3.1 per cent and, to date, brings the calendar year return for 2018 to just 1.8 per cent, with ongoing market weakness in December likely to eat away at what is left of super’s gains through 2018.

Members invested in the median growth option are now sitting on an annual return of 1.2 per cent, while those with 100 per cent exposure to Australian equities suffered a steeper decline in November of -2.4 per cent, pushing them well into negative territory for the year to date, with a total return for 2018 of -2.4 per cent.

Meanwhile, despite suffering heavy losses in October (-5.8%), and smaller losses in November (-0.4%), members invested in the median international equities option have experienced returns for the year of 2.1 per cent.

The last time super members experienced an annual loss was in 2011, when the median balanced option returned -1.9 per cent, while the median Australian equities option suffered declines of nearly 10 per cent (-9.6%) and international equities dropped -6.7 per cent over the calendar year.

Despite the declines, super members remain well ahead over a 10-year period, with $100,000 invested in the median balanced option in November 2008 now worth $206,366, while the median growth option is worth $217,721 over the same period.

Those invested in domestic and international shares have performed even better over the last 10 years, despite a more volatile 2018 with $100,000 invested in the median Australian shares option in 2008 now worth $230,482 and the median international shares option rising to $238,925, over the same period.

Meanwhile, $100,000 invested in the median cash option 10 years ago would be worth only $130,549 today.

“Heading into 2019, it looks like members will need to get used to some of the volatility we’ve seen in markets over the past two or three months,” said SuperRatings sxecutive director Kirby Rappell.

“This is certainly a challenging environment for super funds.

“Share markets are under pressure globally, and recent data indicates that the economy is weaker than expected, with downside risks including a softening housing market having a real impact on confidence.”

How has your super fund been performing through this challenging period? Have you noticed the difference?

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Written by Ben

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