Super fund returns slump in April

Falling mining and bank stocks resulted in a dip in superannuation fund returns, with the median balanced fund falling 0.4 per cent during April, SuperRatings data showed.

The median financial year-to-date return was at 10.6 per cent in April, the second negative return for the financial year after September 2014.

Super funds felt the pinch of a decline in Australian shares, falling iron ore prices, and plunging listed property sector and bond markets.

Australian shares fell for the second month in a row, with the ASX200 Accumulation Index dropping 1.7 per cent in April, while the Australian listed property index dipped one per cent.

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But international shares went up 2.4 per cent (the MSCI World Ex-Australia Net TR Index), but a 4.5 per cent increase in the Australian dollar against the US dollar cancelled out the increase and pushed results into negative territory.

"Despite the loss for Balanced funds, it was still a good result compared with the falls across most major asset classes in April," SuperRatings founder Jeff Bresnahan said.  

"The wide range of assets in a balanced portfolio are doing exactly the job they are designed to do, spreading the risk and protecting members' savings during challenging investment conditions.''

Higher-risk options saw a loss up to 1.6 per cent during April, while even low-risk fixed interest markets could not weather the storm of a huge sell-off in international bond markets, Bresnahan added.

Negative markets resulted in the median pension balanced fund falling 0.4 per cent as they could not offset capital losses but returns remain strong at 11.6 per cent due to pension fund tax benefits.

But a more positive Federal budget and the Reserve Bank's interest rate cut could have a positive effect on investment.