The majority of Australian superannuation funds’ balanced options stumbled past 30 June with a positive return to record the seventh consecutive investment year in positive territory, according to SuperRatings.
In the month of June, funds were down 1.3 per cent to drag them into negative territory six out of the 12 months.
SuperRatings chairman, Jeff Bresnahan, said the research house expected the average Australian in a balanced option to see their super increase by 2.3 per cent.
“…but it will be very much the case of ‘haves’ and ‘have nots’ when it comes to individual fund returns,” he said.
“Those in funds that have underperformed this year will see their returns up to seven per cent lower than the more successful funds.
“For 2015/16 we expect results to range between minus one per cent and positive six per cent, so unfortunately for some, they will see red ink on their member statements.”
Bresnahan noted that while Brexit contributed to June’s fall, super funds were already in turmoil prior to the vote and that the 1.3 per cent fall eliminated the 2.3 per cent gain from May.
“With a 5.5 per cent surge in the months of March, April, and May, there was even optimism that many funds could reach well above the six per cent return for the year. The exit vote made sure that thought was quickly put to bed,” he said.
He said that while this financial year had been tough for super investors, over longer periods there was still solid performance.
“While 10-year returns are not quite hitting the CPI+ 3.5 per cent target, this is largely reflective of the market challenges during the GFC [Global Financial Crisis],” Bresnahan said.
“We expect 2016-2017 will continue to present challenges, but long-term performance should continue to hold up.
“There is no doubt that the volatility experienced in financial markets over the year has resulted in subdued returns and, with this in mind, super fund members should be pleased with a positive result.”
