Super funds decline amid market volatility
Superannuation funds bore the brunt of financial market volatility, with the median balanced option declining 1.7 per cent for the first quarter of the 2015/16 financial year, SuperRatings data showed.
The weaker results came as most balanced options have significant exposure to equities, and recent decline in domestic and international share markets hindered super fund performance.
This is only the fifth time super funds have recorded a negative quarter in the past five years, and it was reinforced a one per cent decline in September, and 2.9 per cent decline in August, the biggest monthly loss since the global financial crisis.
SuperRatings founder, Jeff Bresnahan, said concerns about global growth only increased in September even as market sentiment remained gloomy.
"These concerns fuelled losses across most major financial markets, making September another challenging month for superannuation funds and further pulling down the quarterly result," Bresnahan said.
But long-term performance of the median Balanced Option remained strong, with an 8.2 per cent return per annum over five years, and an average 5.9 per cent per annum return over the last 10 years.
The ASX200 Accumulation Index fell three per cent in September and 6.6 per cent for the quarter, while international shares fell 3.7 per cent in September and 8.3 per cent for the quarter.
However, because super funds hedge part of their exposure to international shares, a fall in the Australian dollar against the US dollar helped fend off some of the international share losses.
AUTHOR
Malavika Santhebennur
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