Super returns bounce back to growth

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Superannuation funds have bounced back to strong growth after seeing returns shredded in the first quarter of 2018.

SuperRatings research house reported yesterday that in April, the median balanced super fund returned 1.7 per cent, fuelled by gains in Australian and global stocks.

The spike followed two months of negative returns, with median balanced funds down 0.7 per cent in March and 0.3 per cent in February.

SuperRatings chief executive Kirby Rappell said the comeback proved the robustness of the sector and its ability to grow members’ returns through uncertain times.

“What the April data shows is that superannuation serves members well through the market ups and downs,” Mr Rappell said. “Members with full equity exposure will have been rocked around by the volatility earlier in the year, but for super members in balanced or growth options, the ride has certainly been smoother.”

Super members who had a full exposure to Australian shares collected the most handsomely in April with a median return of 3.5 per cent – a sharp turnaround from March’s fall of 2.9 per cent. Those with funds in a growth option saw returns of 2.2 per cent.

For the year to the end of April, the median balanced option returned 8.1 per cent. This is just slightly less than the five-year average of 8.5 per cent and much higher than the 6.6 per cent recorded over 10 years.

According to SuperRatings, $100,000 invested in a median balanced fund in 2008 would today be worth $173,500.

“But picking the right fund can make a big difference to retirement outcomes,” SuperRatings said. “The best performing balanced option has grown to $194,341, compared to the worst performing fund, which has grown to $139,831 over the decade – a difference of $54,510.”

The SuperRatings data shows that REST and CareSuper remain the best performing balanced options over the last decade for those in the accumulation phase, with returns of 7.1 per cent a year.

Interestingly, the long-term differences between balanced and growth options are relatively small. Investing $100,000 10 years ago in a growth option would create a balance of $174,158 today – a difference of just $652 compared with the balanced fund.

Among growth options, CareSuper,w has outperformed the pack with a return of 7.5 per cent a year over 10 years, followed closely by Energy Super and Catholic Super on 7.4 per cent.

Mr Rappell cautioned super members not to become too optimistic about strong growth every month from now on.

“Members are undoubtedly pleased to see the back of the sort of volatility we experienced in February,” he said. “But volatility is still high compared to the historic lows of last year, and for the rest of 2018 it is hard to see this theme of volatility disappearing off the radar.

“Central banks have begun to tighten monetary policy in response to inflation expectations, and this will require super funds to navigate a changing global market environment.”

How did your superannuation fund fare? Did it make it onto the Top Ten list? Would you consider switching funds to get a better return?

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Written by Olga Galacho


Total Comments: 7
  1. 0

    Good to see.. share market fluctuations … but as a COB (cynical old bastard) is it possible that this could be a little politically inspired gaming to make things a little rosier.. unions/Labor are not exempt and neither are businesses/LNP.

    Joke time:- (be thankful you don’t cop my keystroke error word for today, as some do)

    Asian entrepreneur is constantly in and out of Australia, and forever changing his money….. one day he comes to the currency exchange and gets only three quarters what he usually gets…

    “What happen?.. he says..

    “Fluctuations’, replies the clerk…

    “Well – fluc tu Australians, too!”.. replies the Asian…

    Got that joke while I was defending the airports/universe from the scum of the universe… in a past life.

  2. 0

    Frankly, the ins and outs of these matters are mysterious. 10 year performance, tells us the past. What about the fee structure for these picked winners? For some retired people there is a cut off to get superannuation started, switching funds comes at a penalty. Seems the way things are organised the choices diminish as we age. And then, try to find a financial adviser who is gong to be interested in your situation instead of theirs. Then what ever is true now, might not be true tomorrow. Might as well be floating on a board in the sea as far as figuring out how to navigate this mess of a honey pot.

  3. 0

    My little Industry fund has been going great for a number of years .As long as you stay away from the funds run by the likes of AMP and the big banks you can’t go wrong.Rule changes by both Governments are a big problem they just can’t understand it is our money not theirs .

    • 0

      I was with the CBA, only just changed and already so happy. Should have done it earlier, but glad it is done. CBA fees are a rip-off.

  4. 0

    Fortunately I found an independant Financial advisor (linked to my accountant) while I was still working.

    An absolute diamond , my SMSF set up by him is still performing well.

  5. 0

    Damnit – where’s the hate team? Not a good strand without them…… come on, boys.. gimme a little hate…. bring it on…



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