Returns for median superannuation funds fell slightly short of double digits over the past financial year, with research house, Chant West, recording returns of 9.2 per cent for median growth funds.
This is the second year in a row Australian superannuation funds have posted positive returns following the period of negative returns brought about by the global financial crisis (GFC).
Chant West principal Warren Chant said that while for much of the year it appeared the final return would hit double digits, nervousness set in over the final quarter.
However, he said the 9.2 per cent median return represented a good result and a consolidation of the 10.4 per cent return recorded in the previous 12-month period.
“The GFC had a profound effect that will be felt for years in the performance tables,” he said. “It resulted in two consecutive years of negative returns, which is unprecedented.”
Chant said that after falling 27 per cent during the GFC, growth funds had now returned 31.5 per cent since share markets bottomed at the end of February, 2009.
“In normal times that would be quite impressive, but the damage done by the GFC has still not been fully repaired,” he said. “The median fund still needs to put on another 6 per cent to get back to the pre-GFC levels achieved in late October, 2007.”
Chant said industry funds had finished slightly ahead of retail master trusts over the period, returning 9.5 per cent versus 9 per cent — the eighth year out of the past 10 years that they had succeeded in doing so.
“Industry funds as a group finished slightly ahead of master trusts because they tend to have lower allocations to unhedged international shares and bonds, which were among the poorer performing asset sectors,” he said.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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