Industry funds no longer dominating returns
The Global Financial Crisis (GFC) did many things and the latest superannuation funds performance data confirms it eroded the dominance of industry superannuation funds.
The superannuation data shows that in the seven years since the start of the GFC, little has separated the performance of industry funds and their retail counterparts and that you need to look back 10 to 15 years to see serious out-performance by industry funds.
With two major superannuation ratings houses — Chant West and SuperRatings — pointing to Australian superannuation funds headed towards a third year of double-digit returns, Chant West acknowledged the gap had closed since the GFC.
"Industry funds and retail funds performed in line with each other in the month of May with a return of one per cent," the analysis said.
"However, industry funds hold the advantage over the longer term, having returned 7.3 per cent per annum against 6.1 per cent for retail funds over the 15 years to May 2015. However, performance over periods of seven years and less is much closer."
In fact, the Chant West data shows there is virtually nothing or less than 0.5 per cent splitting industry funds and retail funds in terms of performance over one, three, five, and seven years.
The retail funds are regarded as having closed the gap on the industry funds based on their heavier exposure to equity markets, with the industry funds having previously benefited from their higher than average exposure to unlisted and direct investments.
The Chant West and SuperRatings data showed super returns moved back into positive territory in May, paving the way for another double-digit return for the financial year.
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