Super returns continue volatile ride

Volatility continues to be the prevailing reality for Australian superannuation fund members, but despite the ebbs and flows, funds have fallen just 0.1 per cent for the first nine months of the financial year, according to the latest data from SuperRatings.

The data confirmed that the financial year to date performance had been a story of four positive months offset by five negative months, but a bounce in investor confidence saw the median balanced option jumping by 1.7 per cent in March.

Commenting on the data, SuperRatings chairman, Jeff Bresnahan cautioned that while the most recent returns had been promising and there were signs a global economic recovery might be setting, market volatility would continue to be a factor.

He said the first nine months of the financial year had seen super funds fall by just 0.1 per cent, with four positive months offset by five negative ones.

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"Every step forward during this financial year has been quickly met by a step back and vice versa. While March returns were positive, poor returns in January and February meant that over the full quarter funds lost one per cent and offset the modest gains achieved in the six months to 31 December 2015," Bresnahan said.

"So, in terms of super funds achieving their seventh consecutive positive return for 2015/16, this possibility remains balanced on a knife edge, with even the smallest bit of news capable of moving markets and hence super fund returns, one way or the other."

"Long-term returns remain solid, despite recent market turbulence," he said.

"Over a 10-year period, returns are not quite at the CPI+3.5 per cent benchmark, although this is reflective of a more challenging investment environment post-GFC. However, when we look back to returns since 1992, the story remains strong."