Members in a median balanced option superannuation fund will be looking at an annual return of around 15 per cent this year, according to research house SuperRatings.
The report noted that a rebounding share market saw the ASX 200 Index return 3.3 per cent in November, putting Australian shares on track to deliver a return of around 26.0 per cent for 2019 – the highest growth investors have seen since 2009. This is despite weakness from the major financial sector, which slipped 2.0 per cent over the month as the major banks were marked down due to the lower interest rate outlook, while Westpac (-13.1 per cent) was the latest to be hit with negative headlines.
Looking at November’s results, the median balanced option returned an estimated 2.0 per cent over the month, with Australian shares contributing 0.6 per cent and international shares 1.0 per cent, bringing the year-to-date return to 14.8 per cent. The median growth option delivered an estimated 2.3 per cent over the month, bringing the year-to-date return to 17.2 per cent.
Over the past five years, the median balanced option has returned an estimated 7.9 per cent p.a., compared to 8.7 per cent p.a. for growth and 4.9 per cent p.a. for capital stable.
“We may not have seen the ramp-up in shares before Christmas that some were hoping for, but it’s still safe to say that 2019 has been a highly successful year for super funds and their members,” SuperRatings executive director Kirby Rappell said.
“It’s been a nervous year for investors, so it’s great to see that super can deliver some much-needed stability and solid returns during this period. There might not be a lot of positive economic news at the moment, but at least super is one story we can all draw some hope from.”
“Since the royal commission’s final report at the start of the year, super funds have fought hard to restore members’ trust in the system. We’ve seen good funds responding proactively to the changing regulatory landscape, which has been pleasing. We expect to see an increase in fund mergers in 2020, but it’s important that regulatory responses don’t move us towards a one-size-fits-all approach, which could be detrimental to member outcomes.”
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