Median balanced super funds return 10.3%

Superannuation funds could crack double digits this financial year depending on how Australian shares perform in the final week, according to SuperRatings.

SuperRatings’ latest data found that the median balanced superannuation fund option returned 10.3 per cent for the financial year to May, with market weakness in June the only barrier to ending the financial year in double digits.

The top three performing funds exceeded 12 per cent for the financial year to date, with five-year returns holding just above 10 per cent per annum.

HOSTPLUS – Balanced was the top performing fund at 12.4 per cent for the financial year to date, followed by First State Super – Growth at 12.3 per cent, and Sunsuper for Life – Balanced at 12.2 per cent. Nine out of the top 10 funds were not-for-profit funds.

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SuperRatings chair, Jeff Bresnahan said global shares had been the big driver of returns over the past year, supported by a fall in the Australian dollar in early 2017.

“Market momentum has been strong, and in the US and Europe we are still seeing markets pushing to record highs,” he said.

“Australian markets have benefitted from this momentum, but recently we have seen a noticeable pullback, with banks the hardest hit, and just this week we saw the largest single-day fall in the ASX [Australian Securities Exchange] 200 since November last year.

“So whether super funds can crack double digits this financial year could depend on how Australian shares perform in the final week.”

Bresnahan noted that while the outlook for the remainder of the 2017 calendar year was broadly positive, markets were starting to look expensive.

He said markets had time to digest the immediate aftermath of the elections in UK and France, and hopefully this would relieve some of the political uncertainty.

“Major central banks are either tightening or signalling the end of the easing cycle, so we will see if and when the RBA [Reserve Bank of Australia] follows suit,” Bresnahan said.