Growth funds return to positive form in superannuation

The majority of superannuation funds have entered the new financial year on a high note with the median growth superannuation fund returning 3.4 per cent for the month, the highest monthly return since August 2009.

Long-term annualised results for the median growth fund were also sound at 19.3 per cent for one year, 8.7 per cent for three years, 4.8 per cent for five years and 6.8 per cent for the 10 years to the end of July 2013, according to the Morningstar Australian Superannuation Survey.

The survey, published today in interim form, covers the performance of Australian-offered retirement savings vehicles to 31 July 2013 and includes retail and industry superannuation offerings.

According to Morningstar, growth assets produced the best returns for July, with international shares up 7.5 per cent in local currency terms while Australian shares were up 5.3 percent. Global property climbed marginally by 1.2 per cent in contrast to Australian property which fell -0.8 per cent.

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The average allocation to equities within multi-sector growth superannuation funds at 30 June 2013 was 56.5 per cent, with Australian equities at 30.4 per cent and international equities at 26.1 per cent, while the average property exposure was 8.2 per cent.

The average allocation to defensive assets was just under a quarter of portfolios, with 10.3 per cent allocated to domestic bonds, 6.0 per cent allocated to international bonds and 8.5 per cent to cash.

The Legg Mason Growth fund had the highest allocation to Australian shares (48.6 per cent), followed by Legg Mason Balanced (42.8 per cent), and Maple-Brown Abbott (40.3 per cent). These funds were also the best-performing growth superannuation funds over the year to 31 July 2013, with the Legg Mason Growth fund returning 30.8 per cent, the Legg Mason Balanced returning 27.7 per cent, and the Maple-Brown Abbott fund returning 23.0 per cent.