Median balanced super funds return 10.3%

Superannuation funds could crack double digits this financial year depending on how Australian shares perform in the final week, according to SuperRatings.

SuperRatings’ latest data found that the median balanced superannuation fund option returned 10.3 per cent for the financial year to May, with market weakness in June the only barrier to ending the financial year in double digits.

The top three performing funds exceeded 12 per cent for the financial year to date, with five-year returns holding just above 10 per cent per annum.

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HOSTPLUS – Balanced was the top performing fund at 12.4 per cent for the financial year to date, followed by First State Super – Growth at 12.3 per cent, and Sunsuper for Life – Balanced at 12.2 per cent. Nine out of the top 10 funds were not-for-profit funds.

SuperRatings chair, Jeff Bresnahan said global shares had been the big driver of returns over the past year, supported by a fall in the Australian dollar in early 2017.

“Market momentum has been strong, and in the US and Europe we are still seeing markets pushing to record highs,” he said.

“Australian markets have benefitted from this momentum, but recently we have seen a noticeable pullback, with banks the hardest hit, and just this week we saw the largest single-day fall in the ASX [Australian Securities Exchange] 200 since November last year.

“So whether super funds can crack double digits this financial year could depend on how Australian shares perform in the final week.”

Bresnahan noted that while the outlook for the remainder of the 2017 calendar year was broadly positive, markets were starting to look expensive.

He said markets had time to digest the immediate aftermath of the elections in UK and France, and hopefully this would relieve some of the political uncertainty.

“Major central banks are either tightening or signalling the end of the easing cycle, so we will see if and when the RBA [Reserve Bank of Australia] follows suit,” Bresnahan said.

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How misleading is this. The asset allocations for most 'balanced' portfolios for the funds mentioned are not balanced at all. They are 'growth' or even 'high growth'. A day of reckoning is coming...

Yep, Hostplus 'Balanced' is 76% Growth 24 Defensive. On the defensive side is 21% exposure to Infrastructure, Property and Corporate Credit! Equity risk anyone? Nothing to see here, just another top performing fund.

Scary stuff. Cash and fixed interest exposure is 2%. Property and infrastructure being described as defensive. Accountants love this stuff. Get the suckers into the "'balanced'' option and as soon as the markets fall move on out & into a SMSF when they freak out..

If looking at performance on an actual fund basis not this orange versus lemon shyster way the isa lap dogs calculate it and present it, these funds are way off the best returns available if you only look at returns. For example the first choice geared fund returned something like 22% this year, but dont let the members know that, just present some misleading data comparing funds with the same name but with totally different risk profiles to the masses and cross fingers no one picks up on it... again its just lies ,lies and damn statistics!

100% agree. Surely it is misleading to promote an option as balanced with such a heavy weighting in growth investments. I understand offer documents would have "disclosure" that covers the superannuation fund with investment class ranges etc. But to be able to compare "balanced" options, consistency of labeling has to be regulated to some degree.

It's a funny circle. Some of these funds are biting the hand that feeds them. Larger clients just flow into the Hostplus balanced fund with 2% exposure to cash and fixed interest and then as soon as markets falls they end up disgruntled with whole saving process and super system and end up in a DIY SMSF. Destroy it yourself fund, promoted by the accountant. Then Hostplus winges about outflows to the SMSF sector. After sitting in cash for 5 years in the SMSF they then end up crying in my office and I put them back into an appropriately aligned fund mix.

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