Have superannuation funds finally arrested the slide?

Font Size:

Super funds have emerged from the recent market downturn in top shape, recovering from a string of losses suffered in late 2018 as investors regained confidence and share markets were bolstered by a generally positive earnings season.

February’s median ‘balanced option’ return of 2.6 per cent was the highest monthly return since July 2016, while the median ‘growth option’ did even better, returning 3.3 per cent over the month.

Highlighting the strength of the market rebound, the median Australian shares option returned 5.4 per cent over the month, outperforming the median international shares option, which returned 4.2 per cent.

This contrasts with performances at the end of 2018, which saw super funds hit by four consecutive months of negative returns.

Following February’s performance, members invested in the median balanced option are now fully recovered from last year’s market sell-off.

“Super fund performance over the last six months has been a great example of the sector’s resilience in challenging market conditions,” said SuperRatings executive director Kirby Rappell.

“Markets have generally reacted favourably to the recent round of earnings in Australia and the US, while trade tensions have eased, and central banks have backed away from further tightening. But most participants expect volatility to return in the near future, meaning funds must remain focused on long-term performance.”

The positive performance for super funds in February has helped to boost total balances over the 10-year period ending 28 February 2019, with $100,000 invested in the median balanced option in February 2009 now worth $227,149. The median growth option is worth $246,426 over the same period, while $100,000 invested in domestic and international shares 10 years ago is now worth $270,252 and $278,415 respectively. In contrast, $100,000 invested in the median cash option 10 years ago would be worth only $129,990 today.

Fund performance
Australia’s top-performing funds continue to deliver for members, with TelstraSuper’s top-ranking balanced option and industry fund QSuper both returning 9.7 per cent per annum, followed closely by UniSuper (9.6 per cent).

The rankings show how tight competition is among Australia’s leading funds when it comes to long-term performance.

Mr Rappell said the results highlight the need to ensure members continue to have a wide range of high-performing funds to choose from.

“If you look at the top 20 performing super funds, each of them has achieved an average return of over nine per cent per annum over 10 years,” said Mr Rappell.

“Over time, it is common to see movement up and down within the rankings, and this is good for members because it shows there is competition within the sector.”

Has your superannuation balance bounced back this year? Do you expect superannuation to continue to grow this year or is there more trouble ahead?

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Superannuation: why we stick with the duds

An under-performing super fund can cost you about 13 years' pay over a working lifetime.

APRA to put the ‘heat’ on under-performing pension funds

APRA will begin publishing ‘heat maps' of the performance of pension funds next year.

Super changes will improve retiree living standards

The Actuaries Institute has welcomed changes to Australia's superannuation system.

Written by Ben

7 Comments

Total Comments: 7
  1. 0
    0

    If all governments would only keep their greedy hands off it.It is our money they just keep changing the goal post to their advantage.

  2. 0
    0

    In its present mode it will always be a costly and risky venture… only those operating the funds are guaranteed of an income from it, and there is a chance that an entire fund could go belly-up at any time.

    Back to the White Boards, men – and let’s get to designing The Trebor Scheme….

    • 0
      0

      Installing superannuation management on a business basis puts it squarely in the same risk category as any other business – there is a chance that the business will fold and the principals will be forced to escape with a few lost millions… leaving the receivers scratching their heads over where the money went…

      “You weep for the super funds and you curse the Pension Fund.. because you don’t know what I know.. that super funds deaths, while regrettable, probably SAVES MONEY! We are in the business of saving money!! We use words like fiscal responsibility, savings, sacrifice. We use those as a backbone to a life of responsible retirement planning .. you use them as throwaway lines at parties….”… (apologies to A Few Good Men)…

  3. 0
    0

    Let’s split this joint, Igor – we’re playing to a dead audience here….

  4. 0
    0

    I’m also with Telstra, and have noticed that my fund has been growing by over 8% a year for apparently the past 5 years. better than money in the bank. I am over 60 now, so watching my superannuation carefully.

  5. 0
    0

    I am with Telstra Super too. I have been fairly happy with their performance compared to a lot of other funds.

  6. 0
    0

    Floss.how does any govt get your Super? All this govt has done is given in to Shortens demands.cos a free millionaire pensioners have legally added funds to their SMH.


FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Mental Health

What is agoraphobia and how is it treated?

Popping to the shops, picking up a coffee on the way to work, queuing up for entry to a gallery...

Food

Benefits of kefir and what to look out for

Forget kale and nut butter: fermented foods are the one big health trend we'll all be spooning into our diet...

Age Pension

CPI figures point to an increase in the Age Pension in March

After pensioners were denied an Age Pension increase in September last year, due to a rare case of deflation in...

Diseases

MND breakthrough offers hope damaged nerve cells can be repaired

There is hope of a breakthrough in treating motor neurone disease (MND) after Edinburgh researchers found a way to repair...

Health

Avoid these common mistakes people make with bleach

Bleach is one of the most effective and least expensive disinfectants around, but it pays to remember it's not an...

Health

The reasons your hair may be falling out

There are so many possible reasons why our hair falls out or – at very least – thins out, that...

COVID-19

Concerns over limited data on how vaccine will affect over-65s

There are growing concerns that the vaccine expected to be given to the majority of Australians when the rollout starts...

Nutrition

Making healthy eating more affordable

Eating a healthy diet is crucial to our mental and emotional health as well as our physical wellbeing. It can...

LOADING MORE ARTICLE...