Just super, eight years of growth
SUPERANNUATION funds are set to deliver double-digit returns for the financial year, marking the eighth positive year in a row.
According to forecasts from research companies Chant West and SuperRatings, most funds are on track to report investment returns of 10.5 to 12 per cent for the year to June.
“Against all odds, Australia’s major super funds will post a double-digit return for the 2017 financial year and complete an unbroken eight years of positive performance,” Chant West director Warren Chant said yesterday.
“This is an impressive result, especially since we’ve been through an extended period of economic and political uncertainty.”
The final return will depend on today’s session on the ASX 200 index, although a solid result appears likely.
SuperRatings chief Adam Gee forecast the median balanced super fund would return between 11.5 and 12 per cent when markets closed around the world today for June 30.
Mr Gee said balanced funds had clocked up profits of 10.3 per cent for the 11 months to May, advancing a further 1.4 per cent so far this month.
“Members should be extremely happy with the performance. Super funds have outperformed all expectations during the year,” he said.
Chant West also forecast not-for-profit industry funds would outperform retail bankowned funds by 0.7 percentage points for the year.
The strong performance among industry funds comes despite them generally having a broader investment allocation and a lower exposure to the sharemarket, which has been the major driver of investment returns.
Australian shares grew more than 14 per cent, while international shares were up 20 per cent. Listed property fell 3 per cent.
According to Chant West, the last year most super funds reported a loss was 2009, when they slumped almost 13 per cent on average. This followed a 7 per cent fall in 2008.
The new financial year was uncertain, Mr West said.
He said many investment assets were “fully valued or close to it”, indicating it would be hard to replicate.