Super fund quarterly returns highest in three years

super fund investment returns, SuperRatings, March 2015Superannuation research firm SuperRatings says superannuation funds returned a “healthy” 0.6% in March 2015.

This was down from the “robust” 3.0% return in February, but “achieved despite a 0.1 per cent fall in the ASX200 Accumulation Index and declines in international equities,” said SuperRatings.

“Despite falls in popular growth assets, most super funds still produced a positive return, highlighting the benefits of a diversified portfolio,” said SuperRatings founder Jeff Bresnahan.

“Despite uncertainty about Australian and global growth, super funds have enjoyed a strong financial year to date. Funds are well positioned to provide members with another year of solid returns.”

“The March result takes the number of positive monthly returns to eight out of nine, this financial year.’’

The median balanced option returned 5.7% in the March 2015 quarter, the highest quarterly return in the last three years.

The return for the 2014/15 financial year so far has been 10.8%, or 13.1% on a rolling 12 months basis to the 31st of March 2015.

SuperRatings says a “key driver” of the returns of superannuation funds recently has been the holdings of Australian shares, with the ASX 200 Accumulation Index increasing by 10.3% in the quarter.

“The long-term outlook for super funds remains strong with the median Balanced Option producing a 6.8 per cent annual return during the past 10 years to March 2015, and a 6 per cent annual return during the past seven years, despite the impact of the global financial crisis,” said Mr Bresnahan.

“While the strong performance during the year to date is good news, importantly, it is also pleasing that returns during the past five and 10 year periods are above the industry benchmark target of inflation plus three per cent,” he said.

SuperRatings defines ‘balanced’ investment options as those invested in 60%-76% growth assets. This covers 60%-70% of Australians in the default investment option of major superannuation funds. Figures are for accumulation accounts.

Update: ChantWest says “super funds had a strong March 2015 quarter, with the median growth fund (61 to 80% growth assets) surging 5.8%.”

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