30th Aug 2018
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Superannuation assets exceed $2.7 trillion barrier
Author: Olga Galacho
Superannuation assets exceed $2.7 trillion barrier

Some major superannuation funds may have admitted to fee gouging during the banking royal commission, but the sector’s total assets still managed to grow almost eight per cent in the June quarter – compared with the same period last year – to $2.7 trillion.

However, total benefits paid out to retirees in the June quarter slumped 4.7 per cent to $70.4 billion, compared with June 2017.

There are approximately 3.6 million retired Australians, and if half of them have super accounts, on average they would have collected about $9700 a month each during the June quarter.

In the last three months of the financial year, most of the fat was put on by industry funds, which for the first time in a year are bigger than bank-owned retail funds. The not-for-profit funds grew to $631.6 billion, leaving their retail rivals behind on $622.3 billion.

Interestingly, it was the for-profit, bank-owned funds which had the most dirty linen aired at the royal commission, with admissions by most that they had put bonuses for financial advisers ahead of their customers’ interests.

During the past quarter, funds under the watch of the Australian Prudential Regulation Authority (APRA) grew their assets by more than 9 per cent to $1.76 trillion.

The largest growth spurt was recorded by the standardised balanced MySuper product, which shot up by 13.6 per cent to $675.6 billion.

Self-managed super funds (SMSF) also increased the value of their assets – to $750 million (6.4 per cent) – making it the wealthiest category. SMSFs continued to grow in numbers, totalling just shy of 600,000, compared with 582,000 at the same time last year.

Compared with the March quarter, the latest statistics reveal that funds grew a strong 3.6 per cent in the months leading up to the end of the financial year.

However, contributions by employers and members fell 6.5 per cent in the last quarter to $109.4 billion, compared with $117 billion in June 2017.

The average rate of return to the end of June across all funds with more than four members was 7.6 per cent. This is about one percentage point less than at the same time last year and compares with the five-year average of 7.9 per cent.

At the end of June, APRA-regulated funds had more than 50 per cent of their total $1.7 trillion invested in listed shares. International equities soaked up 24.1 per cent, Australian shares accounted for 23.4 per cent, and 3.8 per cent was invested in unlisted equities.

Just over 21 per cent was invested in fixed income and 10.3 per cent in cash. Property and infrastructure made up 13.5 per cent and 3.7 per cent was parked in other investments, such as hedge funds.

Did you notice good growth in your super fund? Do you monitor your fund’s returns against rivals?

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    COMMENTS

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    MICK
    30th Aug 2018
    11:31am
    For the government sponsored trolls please read:

    1. "In the last three months of the financial year, most of the fat was put on by industry funds".
    2. "it was the for-profit, bank-owned funds which had the most dirty linen aired at the royal commission".

    No responses today? I wonder why. As has always been the case Industry Funds beat Retail Funds because union representation keeps the dogs away from the money pile. YOUR money! That is what supporters of Retail Funds do not want to happen.
    Knows-a-lot
    30th Aug 2018
    11:47am
    Quite right, Mick.
    johnp
    30th Aug 2018
    11:54am
    Agree Mick !
    Anyone with an ounce of common sense would be changing to an industry fund asap. Just do their research first as to which has had the best growth.
    pedro the swift
    30th Aug 2018
    12:20pm
    Now watch the new gov pressure to get their "mates" onto industry fund boards under the guise of getting "corrupt " unions of them.
    They would just love to get control of these industry funds and squeeze funds out of them into their "mates" pockets.
    TMac
    30th Aug 2018
    12:40pm
    Give me neither a retail or industry fund, they both rip off their members, rather have control over my own fund any day.
    MICK
    30th Aug 2018
    2:10pm
    Good luck TMac. You will never do as good as fund managers and their fees are fair as long as they are reasonable. Industry Funds are. Retail funds are the top end of town with their snouts in the feeding trough.
    Greg
    30th Aug 2018
    2:27pm
    MICK - just ask Old Geezer, he'll tell you he's getting 20% return or some ridiculous amount on his SMSF.

    TMac - good luck, don't know how long you've been investing but to better the big boys in that game you have to have a lot of luck.
    Rae
    30th Aug 2018
    2:04pm
    Yes good growth in the super fund and good growth in the index investments too. The markets are doing very well. So far so good, nice expensive assets rising in price.

    30th Aug 2018
    2:51pm
    My retail fund made me 15.6% last fiscal year. Veryb happy with my fund managers
    Mez
    11th Sep 2018
    11:38am
    I remember writing here a few years ago stating that industry funds are the best performing as well as stating that one does not have to keep having fund managers who take 1 - 2% fees off from your super fund.
    Also, that you can go online and change your asset classes, 7 main ones to suit yourself after checking the performance figures and listening or reading the business news of which one does not have to be a financial expert but merely follow the trends.
    From going online once a month a few years ago, I now check every week or so. Calling your fund also helps to ask questions to become informed and as a result, I have been able to go on overseas cruises as soon as I have accrued enough over a personally set limit which I won't allow myself to go under.
    My older daughter had asked me twice in so many words wondering whether I've been spending all my super but reassuring that I wouldn't be going on cruises if I had been.
    I only wish that I was monitoring my super decades ago but then I was extremely busy and stressed to the max as a fulltime teacher, single mum and heaps of schoolwork each week night.
    Only takes a few minutes to go online and up to a week to have partial benefits paid into your bank account.
    Being nearly 70 and still working one nursing shift a fortnight with lower back arthritis and under the Pension Work Bonus,one does not know how much longer this can go on before one is too incapacitated, if ever hopefully to continue like this!
    Mez
    11th Sep 2018
    11:50am
    In order to help others to get started, I can say that over recent months, I have most of my money in Private Equity and Infrastructure assett classes wih smaller amounts in Australian Shares and International Shares as well as Property assett classes with only 5% in each of the Cash and Global Bonds.
    During the American election year, it was a very different mix with International Shares performing excellently and in which I had 50% at one stage but no more as having your eggs all in one basket is also very unwise.
    During that year, Global Bonds performed well as it usually does when shares do well as I have discovered and learned so if you have the Internet and some commonsense, anyone can do it!


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