Superannuation had a sluggish start to 2014, with the median superannuation balanced option recording a 0.9 per cent fall for the month of January, according to SuperRatings.
SuperRatings’ Jeff Bresnahan said the performance dip was unsurprising, considering the weakness in equity markets.
“However as markets rallied once again, it looks as though February will recoup losses and super funds are on track for a good 2014, after a very strong 2013,” he said.
Balanced option returns over the first seven months of the financial year stand at 8.3 per cent, with the return over the 12 months to 31 January 2014 sitting at 12.4 per cent.
A $100,000 balance in 2004, accumulated purely by investment earnings and excluding contributions would now sit 95 per cent higher at $195,880, giving an annualised return of 7 per cent per annum and more than 4 per cent above current inflation.
REST Industry core strategy came out on top over the last five years to 31 January 2014, at 10.4 per cent per annum.
As many funds switch to MySuper products, the median MySuper investment option fell by -0.8 per cent in January.
With many duplicating their current balanced investment option for their MySuper product, the median MySuper option returned 7.3 per cent per annum over a 10-year period to 31 January 2014.
This is compared to the median balanced fund over this time, which returned 7 per cent per annum.
“Although the current long-term performance figures across MySuper options would have sat at over 4 per cent above prevailing inflation over this time, in line with long-term objectives, it remains to be seen if this performance can be sustained going forward,” the SuperRatings report said.
Moreover, with almost a quarter of the industry featuring a lifecycle strategy as part of their MySuper investment strategy, a close eye will be kept on how these funds perform compared to static balanced investment options.
