Fund investors rewarded for risk taking

Risk-taking investors in the superannuation funds sector were handsomely rewarded in 2004-05, new research from Intech has highlighted.

The median high growth fund in the Intech Super Survey outperformed the median conservative fund by 4.7 per cent over the past 12 months.

Manager selection also impacted on investor returns during the year, with the Intech survey showing a gap of 2 per cent between top and bottom quartile returns for high-growth funds.

The survey measured the performance of 188 superannuation funds across five risk categories. ESI Super Growth and Macquarie Growth led the field of 30 funds in the survey’s high growth category, both with a return of 16.2 per cent.

First State Super High Growth posted a return of 15.6 per cent to place next best in the category, in which the median fund returned 13.8 per cent for the year.

The median return of the 44 superannuation funds in the conservative field was 9.1 per cent.

All of the 188 funds in the survey comfortably beat cash during the year, attributed largely to a 26.4 per cent return from the Australian sharemarket.

However, the much lower average five year returns — only 5.5 per cent per annum for the median high growth fund — is only slightly better than returns from cash, a reminder of the negative returns of the preceding years.