SuperRatings says there is reason to expect superannuation fund investment performance to improve in the second half of 2018.
The firms says the ‘median balanced option’ returned 3.3% for the 2018 June quarter, which is historically the weakest quarter.
SuperRatings found, between 2008 and 2018, that the balanced option returned on average 1.9% in the September quarter, 1.7% for the December quarter, 1.8% for the March quarter and only 0.9% for the June quarter.
“The results are even more exaggerated for higher growth options. For example, options with a pure Australian shares focus have an average return of 2.3% in the December quarter and -0.6% in the June quarter,” said SuperRatings.
“Luckily this year investors forgot the old adage of ‘sell in May and go away’”, said SuperRatings CEO Kirby Rappell.
“Instead we saw a strong recovery which ended up producing a very positive June quarter for superannuation.”
“If history is a guide, members can anticipate a bit of a kick in coming periods, although this is conditional on the management of some downside risks to the Australian economy, as well as the broader global growth picture.”
The interim results for 2017/18 for SuperRatings has the ‘median balanced option’ – which has 60-76% exposure to growth style assets – with an accumulation return of 9.2%.
“Over the last ten years the median balanced option has returned 6.5% p.a., meaning an account balance of $100,000 in 2008 has now accumulated to $185,412. Growth members have experienced a modest bonus, with a similar starting balance growing to $190,207,” said SuperRatings.
SuperRatings warns that: “Past performance is not a reliable indicator of future performance.”