Aussie shares boost super returns

Australian superannuation fund returns look likely to finish the year in good shape with the latest Intech data suggesting that, once again, domestic equities are continuing to outperform expectations.

According to Intech, the Australian share market is now likely to finish 2005 with a three-year return in excess of 20 per cent per annum.

It said that based on December year-ends, this would be the first three-year period where returns have been above 20 per cent since the 36-month period ending December 31, 1993, when returns reached 24 per cent.

According to Intech, three-year returns in excess of 20 per cent a year have occurred on a number of occasions over the past 25 years, but in almost all instances the following three years have generated lower but still positive outcomes.

“Of course, the last 25 years also includes the three years to September 30, 1990, when returns fell to minus 10 per cent a year, which started with the month of October 1987 when the market fell 40 per cent,” the Intech analysis said.

However, it said the market rose over 50 per cent in the three years to September 30, 1987, so the correction was arguably justified.

“On this basis and looking beyond 2005, history suggests there is little reason to suspect disaster lies ahead,” the analysis said.