Increasing confidence that Australia has put the worst of the COVID-19 pandemic behind it has delivered super funds their best month of 2020.
Super funds recorded strong returns in November, based on the easing of restrictions across Australia, and as talk of approval and distribution of a vaccine for the coronavirus gathered steam.
Share markets around the world surged to record highs in November and this delivered windfall gains to super members.
Not only did November herald the strongest returns of the year, it was also the eighth consecutive month of positive returns for members.
The median balanced option returned 4.9 per cent in November, which has put them back in the black over the course of a difficult year, according to estimates from leading superannuation research house SuperRatings.
Since the start of the year, the median balanced option has delivered 2.3 per cent and is on track to finish the year in positive territory.
The figures also show that super has returned 7.5 per cent from the start of July to the end of November, reversing the large falls of February and March.
According to the SuperRatings data, the median growth option returned an estimated 6.2 per cent in November and 2.4 per cent over the calendar year, while the median capital stable option returned an estimated 2.0 per cent in November and 1.7 per cent over the calendar year.
SuperRatings executive director Kirby Rappell said super’s ability to bounce back from calamity earlier this year has been impressive.
“We’ve had a watershed month for super and hopefully this strong performance can continue through to the new year,” said Mr Rappell.
“Given the world is battling a pandemic that has resulted in large sections of the economy being placed in lockdown, the results are remarkable.
“This is the year super proved its worth once again and reminded us why it is so critical to our economic success.”
Pension returns enjoyed a similarly strong month in November.
The median balanced pension option rose an estimated 5.4 per cent in November and 2.6 per cent over the calendar year.
The median pension growth option rose an estimated 6.8 per cent in November and 2.6 per cent over the calendar year, and the median capital stable pension option returned an estimated 2.3 per cent in November and 2.0 per cent over the calendar year.
Mr Rappell said despite the positive outlook for the new year, the trade conflict between Australia and China could cause a loss of momentum in 2021.
“Australia’s success in containing the coronavirus has put us in an enviable position, but there are still significant risks at play,” Mr Rappell said.
“The pandemic is not yet defeated and there are geopolitical issues weighing on the outlook.
“Members should be optimistic but prepare themselves for potential surprises as we head into 2021.”
Have you been surprised by super’s ability to bounce back this year? How has your fund performed this year? Will you end the year in positive territory?
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