Superannuation funds are expected to produce record negative returns for the 2007/08 financial year.
Superannuation funds have felt the full impact of the decline in equity markets, with SuperRatings estimating 2007/08 returns for some investment options are likely to be the worst financial year results since compulsory superannuation was established in 1992.
The forecast financial results for 2007/08 revealed the median balanced investment option suffered a loss of 6.4 per cent, while the median growth option delivered an even poorer negative return over the period of 9.7 per cent.
Balanced options contained 72 per cent of assets invested in super and growth options accounted for 16 per cent, according to SuperRatings statistics.
However, these will not be the worst-performing investment options for the year.
The median high growth alternative is anticipated to have a negative return of 11.8 per cent and the median Australian share category is expecting a negative 12.2 per cent return.
The median international share investment option is forecast to be the worst for super fund members with an expected negative 17.3 per cent return for the 12-month term.
The only investment categories predicted to give a positive result are cash and capital stable, tipped to deliver a 5.4 per cent gain and a 0.6 per cent gain respectively.
While the one-year numbers look like being record lows, their impact will still be minimal when considering a medium-term investment horizon.
"Super fund members in balanced options have still seen their superannuation assets appreciate over 60 per cent during the last five years from investment performance alone," SuperRatings managing director Jeff Bresnahan said.
"To put this in perspective, most funds will have stated that their objective was for growth of around 40 per cent over the same period."
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