(Mar-2005): Super returns on the decline
Superannuation fund members were confronted with the harsh reality of more modest returns in January, according to data provided by InTech Investment Consultants.
Looking at the opening month of the calendar year, the InTech data shows a median fund return for growth-oriented superannuation funds of just 0.5 per cent. This compares with the robust 15.9 per cent return by the median fund in 2004.
InTech’s senior consultant, Andrew Korbel said the return was roughly in line with what members should expect over the long-term from a growth-oriented strategy — around 7 per cent or 4 per cent above inflation.
However, he said people should not be disappointed by the January result.
“While it is natural to feel like things are travelling slower than they have been, any sense of disappointment associated with the slow-down in returns is unwarranted,” Korbel said.
“2004 was an above average year for growth-oriented investing and it is not realistic to expect double digit returns to continue unabated.”
The InTech data showed that Australian shares continued to perform comparatively well, with international equities being the disappointment, down an aggregate 1.1 per cent.
The top performing managers during January were Perpetual (1.8 per cent), Macquarie (1.2 per cent) and ANZ (1.1 per cent).
InTech said that for the seven months of the 2004-05 financial year, the median fund return stood at 8.8 per cent while Perpetual with 12.7 per cent continued to lead from Invesco (11.2 per cent) and AMP Balanced Growth (10.1 per cent) filling out the top three positions.
AUTHOR
Mike Taylor
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