The median Australian super fund will fall slightly short of a third consecutive year of double-digit growth because of drops in domestic and international share markets, says SuperRatings.
Despite previously tipping super funds to record double-digit growth for the 2014/2015 financial year, SuperRatings said the median super fund is likely to post a return of about nine per cent.
SuperRatings pointed out that funds were “hit hard” in the month of June, with the Australian share market falling 6.2 per cent, and a decline in international share markets that saw global indices fall more than 2 per cent over the month.
“Super funds were tracking well for in excess of an 11 per cent return at the end of May, however, the last-minute share market rout substantially reduced the end result,’’ SuperRatings chief executive officer Adam Gee said.
“Global shares have been extremely volatile recently, with the Greek debt problem and the wider implications for the European Commission weighing heavily on investor sentiment around the world,” he said.
“It’s a case of bad timing for the majority of Aussie super funds, which report their important end of financial year results at June 30, unlike many other countries which have different financial year ends.”
Chant West also said super funds will fall short of double digit growth, estimating that the median return is likely to be about 9.5 per cent.
“We’re expecting the top funds to report returns as high as 12 per cent, while the bottom end of the range is likely to be about 6.5 per cent,” Chant West director Warren Chant said.
“Generally speaking, the stronger performers will be those that maintained a relatively high exposure to foreign currency (because of the decline in value of the Australian dollar) and Australian listed property, and a lower exposure to Australian shares, bonds and cash.”
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