The median balanced option saw an increase of 0.4 per cent, following a strong 3 per cent gain in July, bringing the median return for the financial year to 3.4 per cent, according to similar figures released separately from SuperRatings and Chant West.
There were mixed results for growth assets this month. Australian equities performed well with a return of 2.4 per cent for the median superannuation Australian Shares option. International shares, however, saw a decrease, with the median superannuation International Shares option falling by 1.2 per cent.
Returns across other asset classes were also mixed. Superannuation fund’s Diversified Fixed Interest was down by 0.1 per cent, Property options were down 0.3 per cent but cash options experienced an increase of 0.2 per cent.
Chant West director Warren Chant said the benefits of diversification were clear from the August results.
“Despite negative returns from international markets, the positive return from Australian shares resulted in the median growth fund finishing the month in positive territory for the 17th time in the past 20 months,” said Mr Chant.
The negative returns from international markets were due to an expected scaling back of the US Federal Reserve’s bond purchasing programme before the end of the year, according to Mr Chant. He added that the political turbulence in Egypt and Syria had also affected share markets.
“Europe continued to show signs of recovery, with the region’s second quarter GDP up 0.3 per cent, ending a run of six consecutive quarters of contraction. While that’s good news, it’s probably too early to talk of a sustainable recovery,” he added. He also mentioned China was showing signs that its growth was stabilising which would be positive for Australia because of our strong trade links.
The positive returns of Australian super funds are the result of increasing confidence in an economic recovery in the United States, Europe and locally as loose monetary policy from global central bankers continues to improve equity markets.
Mr Chant said the median growth fund is now 50 per cent above the GFC low point at the end of February 2009 and 14.5 per cent above the pre-GFC high at the end of October 2007.
“All five of our fund risk categories – even the more aggressive All Growth and High Growth categories which, with their higher allocations to growth assets, suffered severely during the GFC, now sit above their pre-GFC highs,” he said.
SuperRatings founder Jeff Bresnahan said the short-term results had been positive for fund members and with a 10-year return at 6.9 per cent, funds are exceeding long-term objectives despite a strong volatility over the period.
Mr Bresnahan said the industry could, however, be impacted by a removal of the Low Income Superannuation Contribution and the two-year deferral of the rise in Superannuation Guarantee by the Coalition government.
