Superannuation funds were “hit by difficult investment conditions,” said SuperRatings (PDF), with the ‘median balanced fund’ falling by 0.4% in April.
“Despite the loss for Balanced funds, it was still a good result compared with the falls across most major asset classes in April,” said SuperRatings founder Jeff Bresnahan.
“The wide range of assets in a Balanced portfolio are doing exactly the job they are designed to do, spreading the risk and protecting members savings during challenging investment conditions,’’ he said.
“Losses across higher-risk options ranged up to 1.6 per cent during the month. Even the traditionally low risk fixed-interest markets fell during April because of a major sell off in international bond markets.”
The investment loss in April is only the second monthly drop in the 2014/15 financial year, with a 0.6% fall in September 2014.
“The median financial year to date return sits at a healthy 10.6 per cent. This time last year, the median return was 11.1 per cent and went on to produce a full year return of 12.7 per cent,” said SuperRatings.
“While market movements can create short-term losses, it is important for people to keep in mind the performance of their fund over the longer term.”
Also, as SuperRatings warns, “past performance is not a reliable indicator of future performance.”
Note that SuperRatings defines ‘median balance fund’ to mean super funds invested in a ‘balanced’ option of between 60% and 76% growth assets. SuperRatings says 60% to 70% of Australians have their superannuation invested in the default investment option, which is most often the ‘balanced’ option. Returns are calculated net of fees and taxes.
Update: Chant West have released their superannuation investment performance statistics for April 2015, saying:
Super funds were down in April, with the median growth fund (61 to 80% growth assets) losing 0.4% for the month. However, they remain well on track to deliver a sixth consecutive positive financial year, with the return over the ten months of the year to date standing at a very healthy 10.9%.
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