Only one retail fund has featured among the top 10 rankings in a SuperRatings survey of balanced super fund performances last year.
Zurich’s isuper Managed Growth Blended took out fourth place for a net return of 16. 2 per cent, behind industry funds, MTAA Super Balanced (19 .3 per cent), Westscheme’s Trustee Selection (17.7 per cent) and LUCRF Balanced Plus 17.0 per cent.
Following Zurich on the rankings were a swag of six industry funds, including STA Balanced Plan (16.5 per cent), GESB WSS Growth (16.2 per cent), Cbus Super Balanced (15.8 per cent) ,and ARF Balanced (15.7 per cent).
The survey found the median balanced super fund returned a net 13.7 per cent for the full calendar year ending December 31, 2005, with a high of 19.3 per cent and a low of 9.9 per cent.
It found that median fund returns increased by 2.1 per cent in December, pushing total average fund returns for the six months ended December 31, 2005 to 9.1 per cent.
Despite the strong short-term results, long- term returns continue in line with most balanced funds’ objectives with the average five-year performance of a more subdued annual 6.8 per cent.
SuperRatings managing director Jeff Bresnahan described the median performance over the year as “unsurprising , given Australian equity markets are at all time records and international markets are rebounding”.
He added that the strong medians returns may be “painting a false sense of security for some, while those Australians who continue to assume their fund is competitive may be in for a nasty surprise come retirement.
“By way of example, the range of returns in the balanced option area alone between the best performing and worst performing fund has continued to exceed 6 per cent per annum over the last five years.
“This translates into a difference in benefits of over 30 per cent in just five years for two members with similar investment strategies.
“Over both one and three-year periods, the differential in the range of returns is closer to 10 per cent per annum,” he said.
