August super fund returns fell most since GFC: SuperRatings

SuperRatings, superannuation fund investment returns, August 2015Superannuation fund investments fell 2.9% in August, the largest monthly drop since February 2009, during the GFC, according to SuperRatings.

Volatile investment markets heavily impacted superannuation funds with the median Balanced Option recording a 2.9 per cent fall in August, the largest monthly loss since February 2009.

“On the back of concerns about China’s growth prospects, falls across major stock markets have made August one of the toughest months for superannuation funds since the Global Financial Crisis,” said SuperRatings founder Jeff Bresnahan.

The ‘median Balanced Option’ fell 2.9% in August, the largest monthly drop since February 2009.

“While Balanced funds experienced losses in August, once again, the benefits of diversification across asset classes within these portfolios was evident, with the declines well below those experienced across most major growth asset classes.”

“With further market volatility expected and ongoing concerns over global economic growth in the coming year, superannuation funds ability to manage down-side risk will be crucial going forward” Mr Bresnahan said.

According to SuperRatings the ASX 200 Accumulation Index fell 7.8% in August.

“The Australian Listed Property market also experienced a 4.0 per cent fall for the month.”

As in July falls in the Australian Dollar versus the US Dollar have “helped offset” some losses on international equities.

“The 2015/16 financial year has experienced a shaky start, with the median Balanced Option return for the two months to August sitting at -0.6 per cent,” said SuperRatings.

“This is well below the median financial year to date return of 2.1 per cent observed this time last year and may continue to worsen further, with returns on major sharemarkets also negative during the first two weeks in September.”

Despite recent falls, long term performance “still remains strong.”

“The Median Balanced Option has returned a healthy 8.9 per cent per annum over the last 5 years and returns over the last 10 years currently sit at 6.0 per cent per annum, closely tracking a common CPI+3.5 per cent investment objective.”

SuperRatings warns that “past performance is not a reliable indicator of future performance.”

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