Funds on track for super year with returns up 7.5pc

SUPERANNUATION funds are back in profit, returning 1.7 per cent in April, helping to offset March losses and on track for another strong financial year.

The April increase has pushed up total returns so far this financial year to more than 7.5 per cent, with two months to come. This puts the average balanced option fund on track for a ninth straight year of profits.

According to independent research companies SuperRatings and Chant West, most of the increase during April was from a rise in share markets in Australia and internationally.

“The April data shows superannuation serves members well through the market ups and downs,” SuperRatings chief executive Kirby Rappell said.

“Members with full equity exposure will have been rocked around by the volatility earlier in the year but for super members in balanced or growth options, the ride has certainly been smoother,” Mr Rappell said.

During the past ten years the median balanced super fund has returned an average of 6 per cent every year. This compares with the median growth fund, more than 80 per cent invested in listed assets, which has also returned 6 per cent during the same period but with greater risk.

Chant West research manager Mano Mohankumar said Australian shares increased 3.8 per cent during April, while overseas shares went up by 1.9 per cent. Listed property units also increased 4.3 per cent in Australia and 2.9 per cent internationally.

Unusually, not for profit industry funds underperformed bank-owned retail funds during April. Mr Mohankumar said industry funds returned an average of 1.6 per cent, while retail funds returned 1.8 per cent for the month. However, for the year to date, industry funds were still well ahead at 8.1 per cent, compared with retail funds at 7.1 per cent. Mr Mohankumar said super fund members with a ten month return of about 7.5 per cent, were on track for a strong financial year.