Superannuation funds back to pre-GFC highs

Australian superannuation fund performance has reached its pre-global financial crisis (GFC) peak off the back of a strong September quarter, where the median balanced fund returned 4.3 per cent.

The news comes from SuperRatings monthly super fund performance report for September, which recorded 1.5 per cent as the median balanced fund return for the month. 

The median balanced option has returned 8.2 per cent for the calendar year to date, while the best fund results have returned close to 10 per cent in the last nine months.

SuperRatings founder Jeff Bresnahan said the results would allow members to re-engage with the retirement benefits that their super would provide.

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The median cash option returned 3.8 per cent after tax over the past year - less than the five-year average of 4.3 per cent. 

Based on an initial $100 000 investment, the median balanced option outperformed the median cash option by 9.2 per cent or approximately $14,500 over 10 years, according to SuperRatings.

But SuperRatings said the returns for balanced funds in the SR50 balanced index ranged from 3.5 per cent to 7.5 per cent, and based on an initial $100,000 investment 10 years ago, the difference between the two accounts would be $64,000.

"It is not about picking the best returning fund, but ensuring your fund is providing you with competitive long-term, say, 10-year returns. Based on the 10-year measure, if you fund is significantly underperforming, you need to ask some hard questions as to why," Bresnahan said.

SuperRatings said a lack of bad news internationally had buoyed internal share performance, which was tracking at 12.3 per cent return for the median international share option, and the monthly median international share option increasing 2.4 per cent.

Australian share options returned 1.9 per cent.