Super stays steady as dollar drops

The Australian dollar falls to a five-year low, but superannuation returns remain steady.

Super stays steady as dollar drops

The Australian dollar may have fallen to a five-year low, reaching 80.5 US cents yesterday, but despite the drop, superannuation fund returns remain steady.

Most analysts expect that the dollar will slip even further. Some experts, including Comsec’s Craig James, agree that the Australian dollar may fall a further 10 cents against the greenback.

"Clearly the investors around the world believe the best place to put your money at the moment is in the stronger greenback," says Mr James. “This is all because the US economy is stronger.”

Superannuation fund returns for 2014 were a little less than half the returns of the year before, but remained steady, mainly due to the lower Australian dollar.

According to the research firm SuperRatings, the average ‘balanced’ investment option earned 7.5 per cent in the last year, down from the unusually strong gain of 16.3 per cent in 2013, but better than local share market returns of 1.4 per cent in 2014.

This is a solid outcome for balanced investments driven by international shares – further illustrating the value of portfolio diversification, including diversification overseas.

While last year's returns were down on the 2013 outcome, they were roughly in line with average annual returns. In fact, balanced funds have rebounded more than 70 per cent from their lows during the global financial crisis, after suffering a 20 per cent slump in 2008.

"This positive return is the third consecutive calendar year that this has been achieved and is the eighth time in the last decade where positive numbers have been recorded," the SuperRatings report added.

Read more at The Guardian.

Read more at ABC.net.au

Opinion: Silver linings

Alarm bells could be ringing at the notion of the Aussie dollar plummeting, but it may not turn out to be all that bad for our economy.

The news that superannuation returns have benefited from the lower dollar is indeed promising, but there may be other silver linings surrounding the cloud of our dollar dropping in value.

Australia's mining exporters may suffer, because they will get less return for what they take out of the ground. On the flipside, foreign companies will be willing to buy more Australian products because they will be cheaper. Local mining exploration may be strengthened as well, because it will be more expensive to explore overseas.

The local tourist industry will benefit because Australians may now begin holidaying closer to home, rather than heading overseas where it's more expensive. And we should see an influx of foreign tourists because it will be less expensive for them to visit Australia.

Retailers could benefit because it will be more affordable for Australians to shop in local stores or with domestic online retailers. Our education system may be better off because it will be less expensive for foreign students to come to Australia. The local film and television industry may also receive a boost because it will become more attractive to foreign producers.

Local manufacturers should feel less pressure from foreign competition. Exporters of Australian goods should be better off too, because their product will be more affordable and therefore more attractive to foreign buyers.

The government will welcome a lower dollar because export volumes will improve and imports will decline, which will convert to higher national income and GDP growth. The lower dollar may also be an ally to Treasurer Joe Hockey's budget bottom line because it will help to stimulate the local economy and boost economic growth at home.

So, the drop in the value of our dollar may seem daunting to some, but it’s a financial state from which we could take advantage. The local economy could benefit, as long as we make a concerted effort to ‘buy Australian’ – especially those who have been rewarded with returns from overseas investments. Putting that money back into our own economy could help to stimulate growth and get our country back in good financial stead.

How does this affect you? Does the falling Aussie dollar worry you? Or do you see it as a chance to re-invest in our economy on a local level? Is it time you spoke with your financial adviser in order to diversify your portfolio and take advantage of the changing economy?





    COMMENTS

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    Bluejfrog
    6th Jan 2015
    10:13am
    Sounds good to support Australian Manufacturers, but where are they? So many have closed or been closed by lack of Support from this Federal LNP Government.
    ballaratboy
    6th Jan 2015
    10:38am
    The cost of holidaying within Australia is ridiculously expensive and I don't think the fall in the Aussie dollar it will help the locals at all. Secondly, I shop online because I can pretty much buy whatever I like and have it delivered to my door at a very competitive price. Our local shops do not ever seem to have what I am looking for.
    particolor
    6th Jan 2015
    12:23pm
    And have You seen the price of Cheese Etc. ?? I thought all our Cows had Died ??

    6th Jan 2015
    11:37am
    We should all make the most of this situation, I have seen this before and it was really great for Aussie made products etc although not good for Tourist companies selling O/S tours. cruises etc. It just could be a great boost for Australian Industry SAL
    mangomick
    6th Jan 2015
    11:56am
    No good for Aussies wanting to go overseas but good for anyone who wants to come to Australia for a holiday. This is our Governments great vision for future Australians, working as bartenders and maids to flocks of overseas tourists having cheap Aussie holidays in Foreign owned resorts. Good for large farmers wanting to sell produce overseas but for the run of the mill Aussie he will be paying a lot more for everything as these days nearly everything comes from overseas.
    KSS
    6th Jan 2015
    6:09pm
    So mangostick to solve your problems: holiday in Australia, buy Australian products and food stuffs only. Encourage your overseas contacts to come to Australia with all their money, tell your other farming contacts to stop selling their produce overseas and sell more to Australians. And finally if it isn't Australian you don't want/need it.

    There you go all your problems solved.
    mangomick
    6th Jan 2015
    6:20pm
    Not all my problems. I'm actually a bit concerned you haven't visited an optometrist lately otherwise you would be referring to me as mangomick and not mangostick.
    But hey with the Aussie dollar down and your Brit pension up you might be able to go to an optometrist now so I guess yes ...all my problems solved.
    KSS
    6th Jan 2015
    6:29pm
    My apologies for the misnomer mangoMICK.

    You might like to know - not that its any of your business - but I do not claim a pension of any sort from any country.
    mangomick
    6th Jan 2015
    6:39pm
    My apologies KSS. I got you mixed up with Wstaton. Which is a bit of a worry as I only went to the optometrist yesterday. And as the pension goes, neither do I. Now we have no secrets between us:-)
    mangomick
    6th Jan 2015
    11:45am
    Can't understand the rationale behind digging up more to sell for less. Surely it's time for Politicians to start thinking about strategic reserves. Don't allow every precious commodity we own to be dug up in one generation. Slow down the rate of recovery and keep prices stable and allow our environment time to adjust naturally.
    Going too quick at once allows everything to get out of whack and when it ends, it usually ends really badly.
    Wstaton
    6th Jan 2015
    6:00pm
    Australia is being stripped bare by overseas conglomerates. Liquid gas is a prime example where we are expect to pay world price yet 80& of these companies are foreign owned. Means we are subsidizing all the profits for them most of the profits going overseas.

    Did you here the latest there is now a push to try and get the royalties reduced. What is this government doing about it. Nothing. Same as all previous governments. Now they are trying to get GST on fresh food which will make all the lower income earners worse off considering most of their income goes on food. Raise the GST on luxury goods if it has to be raised at all.

    Current raping of Australia is the apples, iTunes and soon to be Netflixs of this world where they charge us heaps more for downloaded goods than elsewhere. Isn't this what we call a cash cow. Stupid us. I refuse to buy any of this stuff online and i don't try to get anything illegally. Just dob't think it's worth bothering about but others obviously do.



    What next!
    particolor
    6th Jan 2015
    6:10pm
    yOU CAN LIVE WITHOUT ANY OF THAT jUNK ! a PHONE AND A dECENT cOMPUTER will GET yOU ANYWHERE !!...Ill try it with the caps Lock off next time ??
    KSS
    6th Jan 2015
    6:13pm
    The real issue for Australians is the constant and all prevailing geo-pricing which keeps goods sold in Australia priced too high and geo-blocking which prevents Australia finding out.

    Adding GST to goods bought on-line from overseas will not change behaviour. For most people the savings made currently are far more than 10%. So adding the GST will still mean most goods bought will still be cheaper than here. Fix that geo-pricing issue and people will return to Australian vendors.
    mangomick
    6th Jan 2015
    8:22pm
    Yes the actual added cost of transport is far less than the actual mark-up of many of those items compared to O/S items. In this day of information and technology we the consumer have the power to stop these mark-ups by forming a consumer network which could look at items that are unfairly marked up and then all members could boycott them and force the price down. Unfortunately businesses know this will never happen,( human nature being what it is), so Australians will continue to get slugged.
    KSS
    6th Jan 2015
    8:34pm
    geo-pricing basically works by the company selling the goods charging different prices in different companies. It has nothing to do with transport costs (although that's what they would have us believe). It has everything to do with charging what they think the market will pay. IT downloadables are a great example. It absolutely costs nothing more to download from Australia than is does say from the USA. So why does Australia pay more for the exact same product? because of geo-pricing. It is the reason why you cannot order from some sites for delivery to Australia.

    geo-blocking allows film companies for example to release films/DVD etc in some countries and not others. So if you go overseas and buy a DVD - legally - you get home and cannot play it on your dvd player here, or you cannot download the same film from an overseas site. When the same film is finally released here it costs way more. Absolutely no reason for it except that Australians will pay more.
    mangomick
    6th Jan 2015
    8:39pm
    Yeah....i thought that is what I said.
    particolor
    6th Jan 2015
    12:33pm
    Yes Mate !! Foreign Companies as You put it are Buying Australian Products and we are subsidising it ?? Shop Locally ?? They are Boarded up ?? Apart from that You live in Pixiland !!
    MICK
    6th Jan 2015
    1:27pm
    Gah gah gah. This has been written by a gen Y.
    So what is 'good' about other countries owning everything in this country? Do you not understand Leon that the PROFITS go offshore. Consider that Australia has no LNG for the domestic market because it is already sold into Asia. Why? Because the companies which own the reserves are not Australian. And now we are selling our freehold farming land to FOREIGN GOVERNMENTS. I find it strange that this does not even merit a mention in the mainstream media whilst it continues to set the nation up to fail where no amount of 'she'll be right' rhetoric will stop the poverty which is coming to future generations.
    Whilst business may be able to better compete with a lower dollar the removal of all form of protections for the nation is what we should be looking at. You think we have a bright future? Dream on.
    Blossom
    6th Jan 2015
    3:10pm
    I know a guy who had his own business assembling carports, garden sheds, garages etc. He could buy a large container of steel which is a well known top quality brand which was definitely manufactured in Australia - a lot cheaper by importing it from India - including freight. It makes you wonder if Aust. subsidising steel that they send overseas.
    MICK
    6th Jan 2015
    4:11pm
    Selling jobs overseas as well as everything is the conventional wisdom. Those making these decisions will be long gone by the time the worst comes. What is often forgotten is that we pay twice: once to make profits for overseas investors and again to pay out dole payments for those who become unemployed.
    I fail to understand that Australians are so simple that they cannot figure out that both sides of politics are a cancer eating away at the fabric of Australian life and that the only cure is to chuck both sides out and try something else. Independents are all that is out there, but as the fires burn all you read is how bad Independents are..........fuelled by the Party trolls who seek to entrench what we have: betrayal.
    particolor
    6th Jan 2015
    4:53pm
    They will get a Shock soon when We have to use their Parliamentary Retirement Fund to fight their Recent Imports !!..
    MICK
    6th Jan 2015
    4:13pm
    Oh by the way.....has anybody noticed how the government trolls are not on this article. BECAUSE THEY DO NOT HAVE TO DEFEND THEIR BOSS!!
    Maybe somebody can alert Solomon, Frank, miss aisle and others (all the one person!!) who fit the bill.
    particolor
    6th Jan 2015
    4:54pm
    Ill BLOW THE BUGLE Or send out a Scout Mick !!
    particolor
    6th Jan 2015
    4:56pm
    I put a dollar in My pocket this morning and when I went to pay for something there was only 70 Cents there ???
    KSS
    6th Jan 2015
    6:03pm
    So repair it (the hole in your pocket) dear Particolor.
    particolor
    6th Jan 2015
    6:14pm
    It was a Gold dollar coin I put in !! and I got Change when I took it out ?? NO HOLE !!
    mangomick
    6th Jan 2015
    6:25pm
    No it wasn't a Gold dollar coin at all. They are 92% copper and 6% aluminium and 2% nickel
    particolor
    6th Jan 2015
    6:38pm
    SHOOGER !! I wasn't gunna say all that to say a Gold Coin ??
    KSS
    6th Jan 2015
    6:44pm
    And you complained about going to pay for something and there was only 70c there. Couldn't have been a 'gold' coin in the first place then.
    bebby
    6th Jan 2015
    5:35pm
    Hey Mick, you forgot to mention Miss Brissie
    Wstaton
    6th Jan 2015
    5:48pm
    We seem to forget those who receive Pensions from overseas that also benefit the local economy. My pension from UK has risen almost $400 a month since the $ has dropped all of it spent locally.
    mangomick
    6th Jan 2015
    6:00pm
    I'm on the phone right now to remind Joe when he makes his next budget that he needs to allow for changes to the exchange rates when Social Security are making adjustments to your part Aussie pension. The little known 11th Commandment......What the Pommy Government giveth the Aussie Government shall so taketh away.
    particolor
    6th Jan 2015
    6:04pm
    Yes I think he forgot that with all the Skiting ??... Declare Your Capital Gains !!..
    Naughty person :-)
    KSS
    6th Jan 2015
    6:18pm
    OK mangomick and Particolor, when the exchange rate goes the other way, will you authorise an increase in the part of Wstaton's pension that is paid by Australia?

    And one more thought. What is the difference in Wstaton having contributed directly to the UK pension during his employment there (a very different system there to that here) claiming a UK pension of his contributions, and Australians on the Government pension of one type or another including Disability and age pension, living overseas and still claiming them here?
    mangomick
    6th Jan 2015
    6:33pm
    I would imagine Wstaton is actually only on a British pension. if he had access to a part British pension and also the Aussie pension I'm pretty sure the Aussie pension would be automatically adjusted to automatically bring it back to the actual aussie pension amount. pretty sure that's what happened to my old man when he was alive and getting a part pommy pension.
    Wstaton
    7th Jan 2015
    12:38pm
    A few assumptions are being made here.

    First I don't receive an Australian pension.
    Second My pension is not related to a government old age UK pension.

    This means all my income from overseas is a benefit to the local economy.

    My O/S pension is not as high as the Aus pension but I supplement it by doing online work, designing and looking after websites.

    The drop of the dollar is good for me as it relieves the pressure.
    TI could apply for a part pension but I refuse to put up with all the crap, loss of privacy and infringement of my freedoms.

    Saying this I abore what the government is doing especially the smug faced politicians who think we have no rights and they have the right to subjugate the less well off whilst enabling the more well off to have unconscionable benefits that they don't really need to live just so they can squander the extra money on frivolous things.

    And saying this again I have nothing against anyone being rich as long as it is gained from their own efforts not by continuous handouts from the government on the pretense that they will have to reduce jobs if they don't.
    Anonymous
    8th Jan 2015
    1:34pm
    Hear, hear Wstaton. I agree
    KSS
    6th Jan 2015
    6:05pm
    Here we go again. 6 days into the new year and already the 'glass half empty' mob are out and about as usual.

    At the close of play today the economy was down 1.6%. But look at the charts its going up!
    mangomick
    6th Jan 2015
    6:12pm
    glass half empty mob maybe right to be a bit negative. Yale Hirsch January barometer indicates that 87.5% chance for 2015 to be not so great.
    particolor
    6th Jan 2015
    6:12pm
    Your Glass will be a Brimmer Soon ..SMILE ! :-)
    Anonymous
    6th Jan 2015
    7:05pm
    Good - its attitudes like mangomick's that will make the 12.5% roll in the dough this year
    mangomick
    6th Jan 2015
    8:31pm
    Well that could change if there's a big announcement of Quantative Easing from the Eurozone later this month. I guess we will find out.
    If there is then obviously things may change but I didn't notice too much of a Santa Claus rally between the 24 dec and jan 5 or an average gain of 1.5% on the S+P. So as the saying goes...so goes January so goes the year.....
    darolcavanagh
    7th Jan 2015
    10:56am
    Mangomick makes a lot of sense. The problem however concerning leaving "resources" in the ground and only slowly extracting is that material in the ground are not resources until they are extracted. So the world market in coal (power) could quickly become the world market for solar and thus coal is quarantined as a "resource".Foreign owned multinational resource companies know this very well and so reduction in extraction time is of the essence. Note what the Arabs are doing to curtail USA trying to control the price of oil.
    mangomick
    7th Jan 2015
    9:17pm
    Can't really see any problem with leaving coal in the ground if we were smart enough to take up the mantle as a world leader in Solar thermal technology or even a world leader in carbon sequestration. I hate our quarry mentality. I dont really see any problem though in being the world repository of radio active waste either as long as the science is proven and the Geology is guaranteed 100% stable and the rewards are significant. . I do see a problem in allowing Australias resources to be sold relatively cheaply and Australia not reaping the full value of those resources or having other industries around those resources suffer through loss of underground water supply ,dust issues loss of natural environment and then at the end of the day the project when it is nearly finished is sold to a junior miner who then goes broke and the landscape is left a mess and it's left for Australian communities ,or State and local governments to fix.
    Not Senile Yet!
    9th Jan 2015
    1:45am
    The Ozzie Dollar only dropped because everyone now realises that the rumours about the Ozzie Government allowing China to buy Farms and Industry are actually TRUE!!!
    So the Dollar value is being re-calculated to allow for the transition to China's currency in the near future!!!!
    particolor
    9th Jan 2015
    9:33am
    How many Yuan Yen or Sen do You want for that Buck Prof ?? Ill throw in some Deeners in case were using them in the near future ??..How would anyone Know what's going on in this Country now ??? We are Blind Folded and Ear Muffed !