POWERED BY MOMENTUM MEDIA
Super returns to pick up: SuperRatings
Superannuation fund members can look forward to the second half of 2018, with SuperRatings predicting an improvement in fund returns after a volatile start to the year but warning that Australian shares will still underperform their global counterparts.
Super funds historically recorded higher returns in the second half of the year, with SuperRatings finding that balanced options delivered an average return of 1.9 per cent in the September quarter and 1.7 per cent in the December quarter over the last decade compared to a 0.9 per cent average for the June quarter.
This June, however, funds saw better growth than expected as the median balanced option grew approximately 1.3 per cent over the month.
“Luckily this year investors forgot the old adage of ‘sell in May and go away’,” SuperRatings chief executive, Kirby Rappell, said. “Instead we saw a strong recovery which ended up producing a very positive June quarter for superannuation.”
“If history is a guide, members can anticipate a bit of a kick in coming periods, although this is conditional on the management of some downside risks to the Australian economy, as well as the broader global growth picture.”
Rappell warned that while Australian shares are set to move higher throughout the rest of the year, they would most likely continue to underperform global markets.
“With the Australian share market dominated by the banks, it is sensible to expect softer growth in the wake of the Royal Commission into Financial Services. The Australian economy has a bit of extra baggage, including low wage growth and a cooling property sector which could impact sentiment, but overall our outlook is positive,” he said.
SuperRatings found that in the ten years to fiscal 2018’s end, the median balance returned 6.5 per cent annualised, with median Australian share options delivering the highest returns as they more than doubled in size over that period.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
