Super still a safe harbour, ASFA says

lehman-brothers/superannuation/ASFA/Martin-Fahy/

10 September 2018
| By Nicholas Grove |
image
image image
expand image

As the world approaches the 10-year anniversary of the collapse of Lehman Brothers, the Association of Superannuation Funds of Australia (ASFA) has found that for a typical fund member who remained in a balanced option over the 10-year period to June 2018, investment returns have added more than 85 per cent of the original balance.

Also, over the past 10 years members in growth options have seen their savings grow by more than 90 per cent, even without further contributions, ASFA CEO Martin Fahy said.

“An individual who sought to avoid any risk at all by investing in cash would have fared much worse, being up only 40 per cent over the 10-year period,” he said.

For example, a person with a $100,000 balance in a cash option in 2008 would now have $140,000. Those who went from balanced to cash in 2009, at the bottom of the market, as a result of the GFC, would have fared even worse.

They would be up only around 10 per cent over the ten years from 2008 to 2018. Their $100,000 balance would have only increased to $110,000 by 2018, Fahy said.

Fahy said that over the last five years, a cash option in superannuation had delivered only about two per cent per annum, while the typical balanced option has delivered between 9 and 10 per cent per year on average.

“Super assets are generally diversified across a range of categories and it is this diversification that enables individuals to weather volatility in the price of specific asset classes like shares,” he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

1 week 3 days ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 month ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month 1 week ago

AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies. ...

2 days 22 hours ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

1 week 5 days ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

2 weeks 6 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Powered by MOMENTUM MEDIA
moneymanagement logo