Have superannuation funds finally arrested the slide?

Funds have emerged from the recent market downturn in top shape.

Super funds bounce back

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?

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    COMMENTS

    To make a comment, please register or login
    floss
    22nd Mar 2019
    10:31am
    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.
    TREBOR
    22nd Mar 2019
    11:15am
    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....
    TREBOR
    22nd Mar 2019
    12:09pm
    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)...
    TREBOR
    22nd Mar 2019
    12:02pm
    Let's split this joint, Igor - we're playing to a dead audience here....
    leek
    22nd Mar 2019
    5:31pm
    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.
    Chrissy L
    22nd Mar 2019
    9:15pm
    I am with Telstra Super too. I have been fairly happy with their performance compared to a lot of other funds.
    Bruce
    29th Mar 2019
    4:55pm
    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.


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