Super fund returns plummet again

Biggest drop since 1992

By Alice Uribe
Thu 02 Jul 2009

Chant West and SuperRatings say super funds will record the worst result since compulsory super was introduced in 1992.

Research houses expect Australian superannuation funds to record a loss of around 13 per cent for the year ended 30 June 2009 - the worst result since compulsory super was introduced in 1992.

Chant West expects superannuation returns for the 2008/09 financial year to fall 13.3 per cent, while SuperRatings has predicted a 13 per cent fall in the median balanced option.

This comes on the back of Chant West figures of a loss of 6.9 per cent in the 2007/08 financial year and marks two consecutive years of losses.

"Back-to-back losses are extremely rare - about a one in 25 chance based on the past 30 years - so this result will confirm that these really are extraordinary times," Chant West principal Warren Chant said.

SuperRatings said it is the first time that consecutive financial years of negative returns have been recorded.

However, according to SuperRatings, the returns compare favourably to the -46 per cent return on listed property and -25 per cent return on the Australian Securities Exchange (ASX) and Dow Jones.

Chant was upbeat about recent returns figures.

According to Chant West data, the growth option was up 4.8 per cent for the last three months and the balanced growth option climbed 3.5 per cent.

"The past three months show a return to a more normal hierarchy, with higher growth options outperforming. Whether this will be sustained depends in large part on the speed of recovery of the global economy," Chant said.

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