Double-digit returns could be on the cards for superannuation funds this financial year, particularly for growth options - those with 61 per cent to 80 per cent of their portfolios invested in growth assets.
According to Chant West research, the median performance of superannuation growth options was now up 8.4 per cent for the financial year to date, while high growth options (81 per cent to 100 per cent in growth assets) were up 9 per cent.
"The positive momentum in Australian and overseas share markets has carried through to February, so the financial year gain is now approaching double digits," Chant West director Warren Chant said.
This is good news for those superannuants who experienced sustained losses between 2007 and 2009.
Although the performance of master trusts and industry funds did not diverge much from each other in January, over the 10 years to 31 January 2011, industry funds outperformed master trusts by 1.3 per cent a year, returning 5.9 per cent over 12 months compared to 4.6 per cent, Chant said.
January was a particularly good month for international equities, which gained 2 per cent in hedged terms and 5.3 per cent in unhedged terms due to a depreciation of the Australian dollar.
"The strong performance in overseas share markets during January was largely fuelled by stronger than anticipated economic data in the US, together with some company profit results that exceeded expectations," Chant said.
Super Ratings data showed super funds now appeared to be back in a growth phase, with the mid to long-term performance of Australia's major superannuation funds showing solid growth.
Over the five years to 31 January 2011, REST Core Strategy was the best-performing balanced option (with 60 per cent to 76 per cent in growth assets), reporting 5.5 per cent compounded returns per year.
OSF Super's Mix 70 option and the BUSSQ Balanced Growth option came in second and third respectively, reporting annual returns of 5.3 per cent and 4.9 per cent.
