Superannuation funds generated strong returns for last financial year despite a last-minute global share market slump in June, according to SuperRatings.
Returns stood at 9.7 per cent for 2014-15 financial year, while June finished down 2.1 per cent.
The share market sell-off was the main reason for the disappointing end, the report said.
“Although market volatility in June prevented most funds from producing double-digit growth for the year, the 9.7 per cent return is still an impressive result,” SuperRatings founder Jeff Bresnahan said.
“This is the sixth consecutive year of positive results, with annual returns during this period averaging 9.2 per cent.”
According to SuperRatings, June experienced the largest monthly loss for the 2015 financial year. Mr Bresnahan said this was because the Greek debt crisis “sent most share markets into a tailspin in June, including Australia”.
“Markets were further spooked by an already volatile Chinese share market. Ongoing uncertainty within Australia’s economy added to the bearish mood of investors, causing most major asset prices to fall and resulting in a 2.1 per cent loss for the media-balanced option in the month of June,” he said.
“Most funds, however, were successfully quarantined from even greater losses within investment markets, including a 5.3 per cent fall in the Australian share market, a 3.0 per cent decline in international shares and a 4.0 per cent fall by Australian Listed Property during June.”
Last financial year’s results were lifted thanks to international shares, ShareRatings said. The shares were the main contributor, with the median international shares option increasing 19 per cent during the 12 months to June 2015, the report said.
This performance was boosted by a significant fall in the value of the Australian dollar, Mr Bresnahan said.
“The majority of superannuation funds hedge less than 50 per cent of their international shares exposure against currency movements. This meant the 18.5 per cent fall in the Aussie dollar against the US dollar during the 2014-15 financial year helped boost returns for superannuation funds,” he said.
A 20-year projection of different income levels confirms that lower earning retirees will be hit hardest by the ALPs proposed removal of fra...
The recent suggestions from the Grattan Institute have been labelled as offensive to working Australians by the nation’s largest super fun...
The major bank has argued that the success of retail super funds shouldn’t be measured by investment returns. ...