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Super funds to record sixth year of gains

Super funds to record sixth year of gains

Taylee Lewis
— 1 minute read

Australian super funds are poised to record their sixth straight year of gains, with the return over the 11 months of the financial year to date standing at 11.9 per cent, says Chant West.

Although share markets recorded losses over the first half of June, it is likely that median growth funds will end the financial year in “double-digit territory” for the third consecutive year, said Chant West director Warren Chant.

“With only two weeks of the financial year remaining, we estimate that growth funds are up 10 per cent with returns in this category likely to range between 7.0 per cent and 14 per cent,” Mr Chant said.

“In fact, since the end of the last negative financial year in 2008/2009, during the depths of the GFC, they have delivered an impressive 74 per cent, which translates to an average annual return of nearly 10 per cent," he said. 

SuperRatings also stated that funds are on-track to record double digit growth - but emphasised that they are in for a "bumpy ride". 

SuperRatings founder and chairman Jeff Bresnahan said: "Declining share markets and ongoing concern about global economic growth have taken a toll on financial markets during early June." 

Strong returns for funds in May are attributed to rising share markets, according to the research firms. 

International shares provided the biggest boost to returns in May, with the median international shares option up 2.6 per cent, said SuperRatings. 

Mr Chant said the US share market rally, signs of improving eurozone growth, and strong performance within the UK market, contributed to strong fund performance. 

Moreover, Chant West indicated that both industry and retail funds performed in line with each other in May, with a return of one per cent.  

Industry funds, however, still hold the advantage over the long term, returning approximately 7.3 per cent per annum compared to 6.1 per cent for retail funds over the 15 years to May 2015, according to Chant West.

 

Super funds to record sixth year of gains
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