Super funds fall but still on track for strong yearly results

Superannuation funds recorded their first negative month of performance following nine months of consecutive growth, according to the super fund ratings houses.

SuperRatings said that although the median balanced fund fell by -0.2 per cent during March, yearly growth was still strong at 12.5 per cent at the end of March.

Super funds still recorded positive quarterly returns, with three consecutive quarters of solid performance leading to the first instance of double-digit returns since 2007, SuperRatings said.

Since the global financial crisis (GFC), super funds have recorded 43.9 per cent growth and are now 7.9 per cent above their pre-GFC peak.

Chant West said the median growth fund was 8 per cent above its pre-GFC levels.

“Members should be pleased to hear that, with only 10 weeks of the financial year remaining, funds are on track to deliver a third consecutive positive financial year return – quite likely in double digits – and the highest since the pre-GFC period,” it said.

SuperRatings said Australian equities were the largest driver of returns in March, which were hit by the Cypriot banking crisis, with the S&P/ASX 200 Accumulation Index falling -2.2 per cent. Super funds came out slightly better, with the SR50 Australian Shares Index falling -1.7 per cent.

Global factors would continue to negatively affect equity performance, according to SuperRatings. It cited the Boston Massacre, poor economic data from China and falling commodity prices. It said a well-diversified portfolio had sheltered super funds from the majority of the fallout, with -0.3 per cent estimated returns in April so far.

Shares and listed property were the stand-out performers in March, according to Chant West.

Despite the slight downturn, Australian shares grew 8 per cent over the quarter and international shares 9.8 per cent in hedged terms, while Australian and global REITS were up 5.3 per cent and 8.8 per cent respectively.