Super funds ‘back in black’ in March: SuperRatings

superannuation fund investment returns, SuperRatings, March 2016Superannuation fund investment returns were back in the black in March 2016, according to SuperRatings.

“Yet another bounce in investor confidence has led to a turnaround in superannuation fund returns, with the median Balanced Option jumping by 1.7% in March,” said the superannuation research house.

“The most recent returns have been promising and will no doubt be of comfort to Australian superannuants,” said SuperRatings Chairman Jeff Bresnahan.

“However, whilst we are starting to see signs that the global economic recovery may be setting in, there is no disputing that market volatility continues to be a factor. Looking at returns for the past year, it would appear that the fight between the Bears and Bulls is far from over.”

Super fund investments have fallen by 0.1% over the first three-quarters of the 2015/16 financial year, with four positive months and five negative.

“Every step forward during this financial year has been quickly met by a step back and vice versa,” said SuperRatings.

“While March returns were positive, poor returns in January and February meant that over the full quarter funds lost 1.0% and offset the modest gains achieved in the six months to 31 December 2015.”

“So, in terms of super funds achieving their seventh consecutive positive return for 2015/16, this possibility remains balanced on a knife edge, with even the smallest bit of news capable of moving markets and hence super fund returns, one way or the other.”

According to SuperRatings the S&P/ASX 200 Accumulation Index rose 4.7% in March, listed property was up 2.4% and international shares up 5.2%.

“However, despite the stronger showing by international markets in March, the rise was largely offset by the rallying Australian Dollar, which rose from USD$0.71 to USD$0.77 during the month,” said Mr Bresnahan.

“While the falling Australian Dollar helped smooth fund returns when overseas markets incurred losses, it may mean that members don’t see as much upside from international shares if the dollar continues to rise.”

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

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