Superannuation funds returned to form in the 2009/10 financial year, with the median growth fund posting an interim return of 10.4 per cent, according to Chant West data.
This turnaround in performance, which was ahead of the long-term expected return of 6 to 7 per cent per annum, was largely driven by a resurgence in listed share and property markets, Chant West director Warren Chant said.
This suited the investment strategies of the master trusts run by banks and wealth management companies, which finished the year ahead of not-for-profit industry funds, according to the research.
“After powering along for much of the year, sharemarkets wobbled in the last quarter, but even so the median growth fund managed a double-digit return,” Chant said.
“That’s a good result and obviously a welcome relief after two negative years. It also means that, taking a longer-term view, funds are delivering to members what they say they will.
“That is, a return that averages 3 to 4 per cent above inflation and a negative return, on average, only every five or six years.”
However, Chant added growth funds still need a further 15 per cent return going forward to get back to the level they were at in late October 2007, before the global financial crisis.
“That’s going to take some time, especially as the European debt crisis is showing no signs of going away and there are some doubts about the pace of growth in the US and Asia,” he said.
“The US reporting season that’s getting under way now is going to be very important for investor confidence.”
