Update: SuperRatings have released the final figures for 2014, see Balanced super fund investment option up 8.1% in 2014.
Superannuation funds achieved returns of 7.5% in the 2014 calendar year, an “impressive” result according to superannuation research company SuperRatings.
Just when markets looked like tanking and taking our super funds with them, Australian superannuation funds have defied logic and benefited from a Christmas share market rally to end the year with further gains in December.
This analysis is based on a ‘median balanced option’, which SuperRatings says represents “approximately 60% to 70% of Australians” in major super funds. This is net of fees and taxes.
Much of this growth resulted from investments in international shares, with the MSCI World Index returning 3.3% in US dollars combined with a 7.9% drop by the Australian dollar against the US Dollar.
Australian shares only “produced a modest return” in 2014, of 1.4%.
2014 super fund investment returns were also lower than the “extraordinary” return in 2013 of 16.3%, which made back some of the 19.7% losses in 2008 resulting from the GFC.
“In fact, since the bottom of the GFC in February 2009, balanced options have rebounded by a massive 72%, fuelled by rebounding stock markets around the world,” said SuperRatings.
SuperRatings analysis shows $100,000 in a super fund at December 2004, invested in a balanced investment option, would now be worth $181,793, compared to $147,709 for a cash index.
Over the past 10 years super funds have returned a median of 6.3% per year, which SuperRatings says puts them on track to meet a target of CPI plus 3.5% per year.
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