Growth funds posted the strongest gains for the year ending 2012, spurred on by positive returns in listed shares and property, according to new research from Chant West.
With the Australian share market posting a nearly 20 per cent return for the 12 months to 31 December 2012, median growth superannuation funds (61 to 80 per cent in growth assets) produced a 12.7 per cent return.
According to Chant West director Warren Chant, "that should help drive home the message that it is a dangerous to try to 'time' investment markets", with cash producing the worst return of all asset sectors and conservative funds (21 to 40 per cent growth) producing 8.8 per cent return for the 2012 year-end.
Of the top performing growth funds, Colonial First State FirstChoice Growth (16 per cent), UniSuper Balanced (15 per cent) and AXA Super Direction Balanced (14.5 per cent) produced the best returns.
With master trusts typically having a higher weighting to listed shares and property, there were six to be found in the top 10.
Meanwhile, three industry funds also made it into the list due to their broader spread of investments cushioning them from the worst of 2011's poor share market performance.
Chant said superannuation returns – despite recovering nearly 41.5 per cent since the 27 per cent lost during the course of the global financial crisis (October 2007 to the end of February 2009) – are only 3 per cent above pre-GFC levels.
"The typical objectives for a growth fund is to beat inflation by 3 to 4 per cent over rolling five-year periods, and to post a negative return no more frequently than one in every five or six years on average," Chant said.
"If we look back over the past 20 calendar years, we can see that funds have achieved those objectives.
According to figures from SuperRatings, balanced funds delivered 11.7 per cent in the 2012 calendar year, and over the past decade the median balanced option outperformed the median cash option by 19.8 per cent as at 31 December 2012.
SuperRatings chairman Jeff Bresnahan said the run of positive returns might help to drive an improvement in personal super contributions and might provide an more attractive investment for those members looking to allocate discretionary funds.
The top 10 performing balanced investment options over the past five years to 31 December were led by LGsuper Accum-Balanced (3.8 per cent), Commonwealth Bank Group Super – Mix 70 (3.3 per cent) and REST Industry Super – Core Strategy (3.2 per cent).
