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Super funds decline in face of volatility
Australian super funds have suffered the second monthly decline in as many months, as global volatility creates an environment not seen by most super members in a decade, according to SuperRatings.
The research house found that members in a balanced fund option in March received interim returns of -0.7 per cent, while those in growth options suffered a drop of -1.1 per cent. Members exposed to Australian shares only suffered the largest slump, at -3.1 per cent.
The cash index was the only one to record gains, growing by 0.1 per cent for March.
Median balances were well ahead of the financial year to date, however, and SuperRatings still believed that superannuation remained one of the best investments over the last ten years.
As the graph below shows, the February and March declines did not significantly damage overall growth.
SuperRatings chief executive, Kirby Rappell, said this data showed that superannuation was still one of the best sources of wealth generation for Australians despite ups and downs.
He also said that super members needed to adjust to the return of volatility to markets.
“Volatility is undoubtedly emerging as the new normal, presenting an environment that many super members have not experienced in a decade. This volatility needs to be managed but no one should lose sight of the fact that super continues to deliver strong returns.”
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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.
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