Superannuation funds are set to produce a 5.0 per cent return for 2015, well below the 12.7 per cent average over the past three years, says Chant West.
According to Chant West, following a loss of 0.3 per cent in November and further losses in December, median growth funds are expected to deliver 5.0 per cent in the 2015 calendar year.
Chant West director Warren Chant said despite the comparatively low level of return, returns of median growth funds will still represent the sixth positive return in the past seven years.
“A more subdued return this year isn’t really a surprise,” said Mr Chant.
“For some time, asset managers have been commenting that we’re heading into a lower return/ higher volatility environment. They believe that many asset sectors are now close to being fully valued, and say they’re finding it harder to identify future sources of growth.”
Mr West said the key themes that influenced markets in 2015 included the timing of the US Federal Reserve’s rate rise and the slowdown in China.
“Back at home in Australia, we’ve seen muted growth as the mining sector slumped further,” he said.
SuperRatings also noted the influence of challenging market conditions on super returns for 2015.
SuperRatings founder Jeff Bresnahan said: “Persistent market volatility has made 2015 a challenging year for most superannuation funds, with negative returns recorded in five months of the year so far and further losses expected in December.
“With downgrades announced to Australia’s growth prospects for 2015-16 and the US Federal Reserve’s historic decision to raise interest rates, the remainder of 2015 will be a bumpy ride.”
SuperRatings said the long-term performance of median balanced options remain stable, returning an average of 5.9 per cent per annum over the 10 years to November 2015.
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