The Association of Superannuation Funds of Australia (ASFA) has found that, for a typical super fund member who remained in a balanced option over the 10-year period to June 2018, investment returns have added more than 85 per cent of the original balance, as the world approaches the ten-year anniversary of the collapse of Lehman Brothers on 15 September.
Also, over the past 10 years members in growth options have seen their savings grow by more than 90 per cent, even without further contributions, ASFA CEO Martin Fahy said.
“An individual who sought to avoid any risk at all by investing in cash would have fared much worse, being up only 40 per cent over the 10-year period,” he said.
For example, a person with a $100,000 balance in a cash option in 2008 would now have $140,000. Those who went from balanced to cash in 2009, at the bottom of the market, as a result of the GFC, would have fared even worse.
They would be up only around 10 per cent over the ten years from 2008 to 2018. Their $100,000 balance would have only increased to $110,000 by 2018, Fahy said.
Fahy said that over the last five years, a cash option in superannuation had delivered only about two per cent per annum, while the typical balanced option has delivered between 9 and 10 per cent per year on average.
“Super assets are generally diversified across a range of categories and it is this diversification that enables individuals to weather volatility in the price of specific asset classes like shares,” he said.
