Superannuation fund investment returns were up in April and may be heading towards another year of positive returns.
According to SuperRatings the median balanced investment option was up 1.4% in April.
“However, the financial year-to-date return remains at a fragile 1.7% — a far cry from the 9.6% returned to super fund members in 2015 — and investors are still bracing for another possible bout of volatility,” said SuperRatings.
“April saw another solid month for superannuation, but the prospect of a positive financial year return is not a certainty,” said SuperRatings Chairman Jeff Bresnahan.
“Following the rocky start to the year, investors are now more upbeat, and we have seen that reflected in the current market recovery. But significant downside risks and a lot of uncertainty in the global economy remain. Outside of share markets, global returns on fixed income are low, and zero and negative interest rate policies are presenting a real challenge for funds seeking to achieve their risk and return targets,” he said.
Chant West also has the ‘median growth fund’ up 1.4% in April, for a 1.7% gain over the financial year to date.
“We estimate that the median growth fund is up a little over 1% so far in May, so with only six weeks remaining we’re now sitting at about 3% for the financial year to date. That means it’s slightly better than an even money bet that we’ll see a seventh consecutive positive year,” said Chant West director Warren Chant.
SuperRatings warns that “past performance is not a reliable indicator of future performance”.