Negative investor sentiment won't dent contributions

Investor sentiment has slipped a further 0.5 points to negative 9.0 over the most recent quarter, although most investors said they would maintain or increase their voluntary super contributions, according to the latest Financial Services Council (FSC)/CoreData Investor Sentiment Index.

Sentiment is 13 points higher than it was at the beginning of 2009 but has dropped more than 16 points from where it finished in 2009, according to the survey of 770 participants from CoreData-brand management’s proprietary database of investors, whose answers were calibrated to Australian Bureau of Statistics population data.

Despite the negative sentiment, three-quarters of investors expected to maintain their current level of superannuation commitments and almost one-sixth expected to increase their contributions while just 6.5 per cent expected their contributions to decrease, the survey found.

Two-thirds of those without a super fund did not feel financially secure, while more than half of those with a super fund did, but despite this 28.8 per cent of investors were unhappy with their super funds.

“While sentiment did not deteriorate significantly, it is clear investors remain uncertain about the future,” said FSC chief executive John Brogden.

“Investor uncertainty is not surprising given the concerns about the European and US economies and the recent period of political upheaval resulting in Australia’s first minority Government in 70 years,” he said.

While investors are reluctant to invest new money, their satisfaction with existing investments remains consistent with the last quarter at 37.7 per cent, and a further 37.6 per cent were neutral, he added.

Steady interest rates over the past three months provided a reprieve for mortgage owners and meant the average household was slightly better off this quarter, according to Kristen Paech, head of advice, wealth and superannuation, at CoreData.

“However, the expectations around future economic growth suggest Australians remain unconvinced that the future is bright, despite the market recovery,” she said.