Australian super funds suffer second monthly decline in returns

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Australian super funds have suffered their second consecutive monthly decline in returns, with global market volatility shaking up the industry in a way that hasn’t been seen in 10 years.

But there is some news, with median balances well ahead for the financial year to date, compared with last year.

With this in mind, superannuation remains one of the best investments over the last decade.

Super funds that invest in Australian shares only have been hit hardest, with a -3.1 per cent decline in returns over March.

Balanced options had interim returns of -0.7 per cent, with members in a growth option copping a -1.1 per cent fall.

However, super members with a balanced option are still ahead so far this financial year, with overall growth of 5.7 per cent and a rolling one-year average of eight per cent.

Median balanced options have returned 5.9 per cent a year, meaning, $100,000 invested in 2008 would now be worth $171,335.

The report shows that being in the right fund makes a major difference, though, with the best-performing funds outperforming the worst by more than $50,000 over a 10-year period.

SuperRatings Chief executive Kirby Rappell says that despite the ups and downs of super, it remains one of the best investment strategies around, but Australians may have to get used to volatility.

“That latest market turmoil has had a short-term impact on super returns,” said Mr Rappell.

“However, it remains overwhelmingly the case that superannuation continues to deliver strong returns to members over the medium to long term and is one of the most important sources of wealth for Australians.”

“Volatility is undoubtedly emerging as the new normal, presenting an environment that many super members have not experienced in a decade. This volatility needs to be managed but no one should lose sight of the fact that super continues to deliver strong returns.”

SuperRatings data shows the top 10 performing funds over the past10 years.

 

How has your fund performed? Have you become used to smooth-sailing super? Will you ride out this storm or switch your investments?

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RELATED LINKS

How is your super fund stacking up?

Industry super funds continue to outperform retail funds and the gap is widening.

Super fund members warned about the dangers of switching

February delivers negative return but long-term performance still positive.

Share losses no reason for super members to panic

Super fund members told to sit tight for share market recovery.

Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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18 Comments

Total Comments: 18
  1. 0
    0

    When you say ‘2008’ I presume you mean post GFC as pre would have had $25K wiped off that $100K. I’m basing that on the fact that I lost 25% of my balance at GFC time

  2. 0
    0

    This is what happens when the constantly outraged insist on non-stop bank bashing.

    • 0
      0

      Yes. Just wait until something stuffs up the current account and all that foreign debt blows up. I wouldn’t hold bank hybrids now for any amount of yield as the risk is too high.

      The banks should never have been deregulated and we wouldn’t be in this mess.

  3. 0
    0

    More scaremongering here.

    Superannuation is not now, nor has it ever been, a short term investment. Panicking over a month to month result is irresponsible. I don’t remember seeing the positive reporting on a month to month bases for the 10 months prior to the last two when the results were in the positive!

    • 0
      0

      It is not an investment but a tax minimisation scheme. returns will depend on asset selections and market performance.

      Returns have been okay. Overseas sharemarkets are now bouncing back. Interest rates will rise. I’m not positive about the ASX because we are well overdue the corrections we avoided in 2008.

  4. 0
    0

    A couple of months , sorry didn’t notice.

  5. 0
    0

    This article is very misleading. The comparisons shown are not true comparisons in that they don’t show the return of the total funds invested. There appears to be a part of each fund shown as it refers to “growth” or “balanced” when no super fund has only those types as the total fund. All funds have a combination of Growth, Balanced, Cash and Property so it would be nice if each of the funds mentioned were to show the overall percentage of profit, not just the bit that did well.

    • 0
      0

      The article also suggests Superannuation is an investment class when it is actually a tax minimisation saving scheme. Returns will depend on asset s held as you suggest.

    • 0
      0

      Having superanuation saves the taxpayer having to fund me in my retirement.

      Paul Keating was the one who deregulated the banks

    • 0
      0

      Super is just a way of saving money that has some tax benefits in exchange for not being able to access your money until the rules allow you.

  6. 0
    0

    IGNORE !

  7. 0
    0

    We lost 25% of our super investments in the GFC also.


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