Super suffers May slump, despite heroic Aussie shares

Super slides in May despite heroic performance by Australian shares.

super slide

SuperRatings has some good news and some bad news about your super.

Australian shares have posted “a world-beating performance”, it says, but funds have been dragged down by falls in international shares. The overall result in the final stretch of the financial year is a softer performance after a typical balanced option return in May was -0.7 per cent.

Markets have since recovered, but members shouldn’t expect a bumper end to the financial year, SuperRatings says. The year-to-date return is sitting at 5.1 per cent for the median balanced option, which is below the 8.5 per cent per annum return achieved over the past 10 years.

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Members in the median growth option, which includes higher weightings to growth assets such as Australian and overseas shares, suffered a larger fall of 1.2 per cent in May, while the median international shares option fell four per cent. The median Australian shares option held firm, returning 1.4 per cent.

“It’s been a disappointing end to the financial year for super, but long-term performance remains robust,” says SuperRatings executive director Kirby Rappell. “The median balanced option return over the past 10 years is around 8.5 per cent, indicating that super has delivered solid returns even in a low interest rate environment.”

The SuperRatings report says that downside risks to the Australian economy, including weak inflation, falling home prices and tighter credit conditions, were taking their toll on consumer confidence, while the US-China trade negotiations had also contributed to market volatility.

Mr Rappell says: “Labor’s negative gearing proposals were thought to favour developers by limiting tax concessions to new stock, but so far the improvement in sentiment has outweighed any negative impact, which may give some super funds a temporary boost to their property portfolios.”

Long-term performance remains strong, according to SuperRatings data. It says $100,000 invested in the median balanced option in May 2009 is estimated to have reached an accumulated $217,391 today.

The median growth option is estimated to be worth $230,873 over the same period, while $100,000 invested in domestic and international shares 10 years ago is now worth $244,382 and $258,181 respectively. In contrast, $100,000 invested in the median cash option 10 years ago would only be worth $129,748.

In other super news, financial planners want the Australian Securities and Investments Commission (ASIC) to be more consistent in the way it views salaried planners employed by industry superannuation funds.

They say that some fund salaried advisers are being paid out of the fund’s administration and investment fees, meaning that all members of the fund are paying for advice whether they receive it or not.

Former Financial Services Council adviser Senator Andrew Bragg says there needs to be better disclosure on the part of all superannuation funds, irrespective of whether they were industry funds or retail funds. Better disclosure and transparency would make it easier for fund members to determine how their fees were being used by their superannuation funds,” he told moneymanagement.com.au.

Are you happy with the performance of your super fund this financial year?

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    COMMENTS

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    TREBOR
    18th Jun 2019
    10:40am
    I've always said the 'private' 'business' paradigm for superannuation funding was fraught with dangers - not least the possibility of resumption by government of 'non-viable' funds, as we've seen recently with the putsch on over non-viable SFRs.

    With $2.8 Trillion currently held by funds, it's a no-brainer to envision the lascivious eyes of politicians of all stamps watering at the thought of dragging it in to 'consolidated revenue' and then dispersing it at their whim.

    The current 'downturn' may be the thin edge of the wedge for a putsch for resumption of super funds, or at least their consolidation into a few tame hands, with mates, of course, at the helm. The attacks on Industry funds could easily be viewed as part of such a putsch.... likewise the commercial funds which mostly struggle compared to Industry.

    Scenario:- fold the (nasty, brutish, thug) Union funds into the commercial funds under our mates - declare the commercial funds non-functional with returns and suffering high costs to the consumer, and resume the lot into some independent body controlled by the government and its old mats (such as Peter Costello, as someone mooted).

    One step removed from 'consolidated revenue' (nothing better than 'investing in your own government', eh?), and leaving ONLY the stolen $130Bn (over which not a peep was raised) sent offshore into the Future Fund to cater to politician retirement largesse and a very few others.
    TREBOR
    18th Jun 2019
    10:41am
    My cynicism speaks loud and clear ... and it speaks for the ordinary person.
    johnp
    18th Jun 2019
    10:53am
    Agree with you Trebor. Also cos the pollies want to add to their obscene salaries, pensions, allowances, etc etc
    Farside
    18th Jun 2019
    11:29am
    "putsch", "lascivious eyes" ... not the sort of words you expect in relation to a conversation about superannuation.
    danielboonjp
    18th Jun 2019
    11:31am
    You are spot on the money, nail on the head, as sure as the sun rises in the east.

    Peter Costello is arguably the most incompetent fool in every spectrum, but especially in finance
    inextratime
    18th Jun 2019
    11:18am
    So the government will deliberately get pensioners off-side knowing there is an election in 3 years time and that their vote probably holds the balance of power. hmmm nice theory.
    danielboonjp
    18th Jun 2019
    11:34am
    many pensioners are totally ignorant about the machinations of LNP and Labor politicians and will like lambs to the slaughter, continue to vote for the butchers
    Farside
    18th Jun 2019
    11:35am
    History tells us that retirees, including pensioners, overwhelmingly vote coalition, or at least conservative. Seems the conservatives can do nothing that is not forgivable or forgotten when the next election comes around. Perhaps this trend will change but not before the war gen and older boomers depart the waiting room.
    Paddington
    18th Jun 2019
    3:08pm
    Farside, the ones I know don’t vote LNP. Some uneducated, unintelligent voters might go for the likes of Pauline Hanson or Palmer whose preferences go to LNP. Scientists are not thinking they are great either with the climate denying happening. Q and A was very informative last night with a range of scientists shedding light on climate change.
    Interestingly, they use data and rigorous research which they persistently study and update. They emphasised they do not use opinion which is what many on here do.
    inextratime
    18th Jun 2019
    11:57pm
    I assume then Paddington that you are already dumping your mobile phone, not driving a car, not using aircraft and not eating meat. If this is not the case then you are a hypocrite because all of those things create carbon emissions. Now if you then tell me that your effort alone will not make any difference I'll let you into this science. Carbon dioxide amounts to 0.04% of the earths atmosphere. Australia contribute 1.5% of the world's carbon dioxide. Australia on its own will not fix climate change one iota. Trouble is neither will renewables be able to provide the base load power that the world needs in its current form, however so many companies are being subsidised to produce solar panels and wind farms, no-one is admitting it. So please do not lecture the uneducated, unintelligent voters, because Paddington they may be a tad brighter than some of the lecturers.
    inextratime
    18th Jun 2019
    11:57pm
    I assume then Paddington that you are already dumping your mobile phone, not driving a car, not using aircraft and not eating meat. If this is not the case then you are a hypocrite because all of those things create carbon emissions. Now if you then tell me that your effort alone will not make any difference I'll let you into this science. Carbon dioxide amounts to 0.04% of the earths atmosphere. Australia contribute 1.5% of the world's carbon dioxide. Australia on its own will not fix climate change one iota. Trouble is neither will renewables be able to provide the base load power that the world needs in its current form, however so many companies are being subsidised to produce solar panels and wind farms, no-one is admitting it. So please do not lecture the uneducated, unintelligent voters, because Paddington they may be a tad brighter than some of the lecturers.
    Karl Marx
    19th Jun 2019
    1:24am
    inextratime, you're talking out your blurter, total nonsense, rubbish, BS, crap
    You say that Australia on its own will not fix climate change one iota is wrong, even if it's 0.01% it's a difference, even 0.001% is a difference.
    Every little bit helps, doesn't matter how small. Clean up our backyard no matter how small our backyard is compared to others. Lead by example.
    You people just don't get it do you.
    GeorgeM
    19th Jun 2019
    4:18pm
    I am afraid, SFR, it is Paddington, who is talking rubbish here. To suggest any voters are "uneducated, unintelligent" just because they don't vote the way he likes is about as stupid as one can be.
    Also, the comments about the biased Q&A are also rubbish, as the panel was full of the one-sided bias with no one presenting the arguments against it. Typical Q&A, which needs to be completely re-aligned to represent ALL views. Sucked in Labor & Greens seem to be the only audience they cater for. I presume Paddington did not listen to the other side or the rebuttal - if he cared to which was presented by Alan Jones on Sky News the next day at his usual 8pm slot. I do listen to both sides. Firstly, Alan clarified that David Karoly had confirmed to him the accuracy of his figures (which he disputed in Q&A) in a call to his radio station a few years ago (the only minor clarification being Karoly now says Australia's contribution is 1.5% instead of 1.3% of all countries) which Alan replayed on air. How come Karoly can't stick to facts - or are they changeable depending on his mood of the day or the audience? Do you / can you have faith in such people? FYI - Alan also replayed an interview on Tuesday morning with an ex-Global Head of a climate change committee in the UN from Sweden - who clarified that there has been NO change to sea levels in Australia's region, nor is there any confirmed link between CO2 levels and temperature!!!
    Also, to clarify what we are talking about, let's repeat some FACTS again:
    The calculation of our (Australia's) effect on the CO2 levels is as follows:
    CO2 in the atmosphere = 0.04%,
    Human contribution to CO2 levels in the atmosphere = 3% of the above,
    Australia's contribution to CO2 levels = 1.5% of the 3% above (with Karoly's revised figure of 1.5% as Australia's contribution), i.e.
    .04% x .03 x .015 = 0.000018% of the atmosphere. What a joke!!!

    NOTE: As a result of these FACTS, the Chief Scientist advised that there would be no effect to the climate even if Australia was fully shut down!
    It's very much a con industry pushed along by vested interests who have gains coming out of such climate-based industries.

    Note also, that compared to Australia's 1.5% contribution out of all countries as noted above, China contributes 30%, USA 15% and India 7% - all these major polluters have refused to be bound by ANY targets for emission reductions under the Paris accord at least until 2030. China & India are also heavily into opening new coal-fired power stations each year!

    Reminds one of The Emperor's New Clothes story - when he was actually naked!
    This would all be really funny, except that we have major political parties believing this rubbish and planning to hit the people with massive changes to help the climate (zero chance) which will hurt most the people on fixed and low incomes, including retirees.

    Let's turn focus back on Super, the focus of this article till Paddington stepped in! That's far more important for Retirees!
    inextratime
    18th Jun 2019
    11:18am
    So the government will deliberately get pensioners off-side knowing there is an election in 3 years time and that their vote probably holds the balance of power. hmmm nice theory.
    danielboonjp
    18th Jun 2019
    11:28am
    the share market is manipulated daily, both here (in OZ) and internationally.

    Self-managed funds are the closest people can get to keeping corporate government's fingers off your money
    Old Geezer
    18th Jun 2019
    2:53pm
    I would not be happy with those sort of returns.
    Anonymous
    18th Jun 2019
    4:40pm
    Generally a self funded retiree can do better depending on what they know.
    I see the industry funds put millions of dollars into the labor party election they have just wasted there clients money. Oh well bad luck if your in one of those you won't get much this year.
    TREBOR
    18th Jun 2019
    5:07pm
    Link me to where the Industry super funds put money into the Labor campaign....
    TREBOR
    18th Jun 2019
    5:09pm
    The Union movement did - Labor is their party, after all - but the super funds?

    I can't find any link to that.....
    Anonymous
    18th Jun 2019
    6:06pm
    Herald sun
    TREBOR
    18th Jun 2019
    11:35pm
    Link???
    Karl Marx
    19th Jun 2019
    1:13am
    come on Roby post the link I can't find it either, even when searching the Herald sun which by the way is owned by Murdoch, say no more princess
    Stuart
    18th Jun 2019
    6:09pm
    I do not bother looking to the super funds for them to tell me about the performance of my nest egg.

    I take the opening balance at the start of the year compare it to the balance st the end of the year and see what the story is.

    At the end of the day that is the only measure of performance that interests me.

    I then challenge the super people with that.

    I adopted this method of doing things when a super guy tried to convince me I had a positive return despite my balance going down !

    What he meant was that I had had a positive return until they subtracted their fees and various admin charges.

    I advise everyone to use my method as it is easy to work out and avoids some of the opaque reporting you receive.

    My super guy hates it but I don’t.

    FYI, I changed my super fund company after the episode described above.

    When I rolled over to a new one I explained What sort of reporting I wanted.

    Now with with an Industry Fund and lots happier with the reporting, if not always the balance !
    floss
    19th Jun 2019
    3:16pm
    I am living quiet well off my Industry Fund and thank the union movement for making this possible.Right again TREBOR.


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