Superannuation funds have had a rocky start to 2016 with median balanced option falling by 3.8 per cent during the month of January to date, wiping out most of 2015’s returns, according to SuperRatings.
The research house found Australian markets were experiencing sharp falls with the ASX200 down 7.4 per cent so far in January, on the back of Chinese markets.
SuperRatings founder, Jeff Bresnahan, said “while balanced options have experienced reasonable losses in January, which have wiped out most of the 2015 calendar year return, these declines remain well below those experienced across share markets, once again highlighting the benefits of diversification across asset classes within balanced options”.
The median balanced option ended 2015 on a 0.2 per cent gain, with a return of 5.6 per cent, but was well below the 16.3 per cent and 8.1 per cent returns seen in 2013 and 2014. However, SuperRatings said it was a solid return given volatile market conditions.
SuperRatings found international shares were again the key driver of returns in 2015, with the median international shares option increasing by 8.8 per cent. Australia shares experienced modest growth in 2015, with the ASX200 Accumulation Index increasing by 2.6 per cent.
The best performing asset class was Australian listed property, rising by 14.4 per cent for the year. Returns on cash stayed low with the median cash option increasing by two per cent, while fixed interest returns provided a median 1.6 per cent return for the year.
Bresnahan said the subdued levels of growth across most major economies and volatile investment markets made 2015 a challenging year for super funds.
“Despite tough market conditions, diversification and a falling Australian dollar have helped superannuation funds cushion the bumpy ride for members and produce a fourth consecutive positive calendar year return,” he said.
