Shares and property boost super returns
Self-managed superannuation funds (SMSFs) with strategic exposures to shares and property would likely have done better in the 2012/13 financial year, according to the latest assessment from research house Chant West.
The Chant West data is based on the performance of the median Australian Prudential Regulation Authority (APRA) median growth fund, but is indicative of how market activity over 2012/13 also impacted SMSFs.
According to the Chant West data, released on Monday, resurgent markets saw the median growth fund (61 to 80 per cent invested in growth assets) return 15.6 per cent, equaling the best performance in the past 16 years.
Chant West principal Warren Chant said there had only been one higher return since the introduction of compulsory super in 1992.
"Who would have thought, in the dark days of February 2009 when markets hit their low point in the wake of the global financial crisis, that the median growth fund would have recovered by over 50 per cent in little more than four years?" Chant said.
"It just shows how, when sentiment is at its lowest ebb, it pays to remember that markets move in cycles and can recover faster than you think."
He said that unless a superannuation investor's timeframe was very short, the worst thing they could do was give up because that meant turning a paper loss into a real one.
"We've now had four consecutive positive financial year returns averaging about 8.8 per cent per annum," Chant said.
"From that low point in early 2009, the median fund has not only recovered all its post-GFC losses but is now sitting about 10.5 per cent above its pre-GFC high, which was achieved in October 2007. That's a major turnaround."
Originally published by SMSF Essentials.
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