Superannuation funds might end the year in negative territory for the first time since 2011 because of the recent market volatility, financial advisory firm Dixon Advisory said.
According to Dixon’s head of advice, Nerida Cole, super fund members should prepare themselves for more volatility which would be driven by the ongoing US-China trade dispute, Italian budget crisis, rising interest rates in the US, slowing in the Chinese economy and a slowing Australian property market. And on top of that would come the complexity of Brexit, she said.
“The big detractors this year were Asian and European share markets – and people with more of their money in these regions would be facing bigger drops,” Cole noted.
“If we see markets continue to fall over the next two weeks – super funds could end up in negative territory.”
Looking ahead, Cole reminded investors they should take a more cautious approach towards investments and check how their super was invested, including spread between shares and cash and whether this mix was right for them.
Investors should also pay a closer attention and review their long-term returns, taking into account the Productivity Commission’s indications that the average valanced funds would return around six per cent per year over the last 10 years.
“In short, there is no need to settle for a fund that’s not working for you and certainly no need to settle for an underperforming fund,” she said.
Future Group is set to take on nearly $1 billion in funds under management (FUM) and welcome more than 100,000 new members following two significant successor fund transfers.
Insignia’s Master Trust business suffered a 1.9 per cent dip in FUA in the third quarter, amid total net outflows of $1.8 billion.
While the Liberal senator has accused super funds of locking everyday Australians out of the housing market, industry advocates say the Coalition’s policy would only push home ownership further out of reach.
Australia’s largest superannuation fund has confirmed all members who had funds stolen during the recent cyber fraud crime have been reimbursed.