Super stretch continues

SUPERANNUATION funds are set to deliver double-digit profits for the financial year, the eighth consecutive year of positive returns.

According to estimates from research companies Chant West and SuperRatings, most funds are on track to report investment earnings of between 10.5 and 12 per cent for the year to June 30.

“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.

“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 the performance of the sharemarket during the last trading day of the financial year today. However, it looks set to stay strong.

SuperRatings chief executive Adam Gee forecast the median balanced super fund would return between 11.5 per cent and 12 per cent when the markets closed around the world for June 30.

Mr Gee said balanced funds had clocked up profits of 10.3 per cent for the first 11 months of the year, with a further 1.4 per cent to date in June.

“Members should be extremely happy with the performance. Super funds have outperformed all expectations during the year,” Mr Gee said.

Chant West also forecast not-for-profit industry funds would outperform retail bankowned funds by 0.7 per cent for the year.

The strong performance by industry funds was despite having a broader investment allocation and a lower exposure to the sharemarket, which has been the major driver of investment returns during the year.

Australian shares had growth of more than 14 per cent, while international shares were up 20 per cent.

Listed property was the worst-performing sector, falling 3 per cent during the year.

According to Chant West, the last year the majority of super funds reported a loss was 2009, when they slumped by almost 13 per cent, following a 7 per cent fall in 2008 – the worst years of the global financial crisis.

The new financial year remained uncertain, Mr West said. Many investment assets were “now fully valued or close to it”, indicating further growth would take longer.