Super returns fall further

Market volatility is continuing to push down superannuation fund returns, with Sydney-based ratings house Super Ratings reporting that the median balanced investment option fund lost a further 0.86 per cent during February, bringing total losses since July 1, 2007, to 4 per cent.

And in what represents bad news for superannuation fund investors, Super Ratings warned that the data for March suggests that there would be even worse news for superannuation fund members, with returns having retreated a further 2.2 per cent so far this month.

Super Ratings managing director Jeff Bresnahan said the ongoing decline in superannuation fund returns was being predominantly driven by falling domestic and international share markets.

He said the last three months had shown without doubt that any superannuation portfolio with substantial exposure to both listed and unlisted markets was capable of going backwards rather quickly.

Despite this, he pointed out that long-term superannuation fund returns had held up rather well, with the best performing funds over five years still showing gains in excess of 12 per cent a year.

Bresnahan said that people only wanted the good news and it did not matter how many times you explained that returns over the medium to long-term were the ones that counted, people tended to look purely at their losses.

The top performing funds over five years as at February 29 were listed as being MTAA Super Balanced with a return of 15 per cent, and Westscheme Trustee Selection, Q Super Balanced and Australian Super Balanced with a 12.9 per cent return.