Australian Super Funds Return 4.5% Over 10 Years

Data from SuperRatings reveals that the average super fund returns have fallen under the double-digit mark, as Australians would have fared better by putting their superannuation solely into Australian shares for the past decade.

(July 29, 2010) — Australia’s balanced superannuation funds, in which 80% of workers have their retirement savings, have returned an average of just 4.5% a year over the past 10 years, weighted down by the global credit crisis, research by SuperRatings found.

In the same period, super funds invested solely in Australian shares returned 6.63%.

Weakness on Australian and oversees equity markets saw the average return from balanced super funds fall to 9.79%, despite more positive predictions that super fund returns for 2009-10 could be as high as 15%. Still, the 2009-10 returns reflect an improvement on the 12.7% during the 2008-09 period and the 6.4% loss from the previous year.

“Whilst not looking great on paper, in a relative sense balanced options have achieved what they set out to do, namely to prevent significant losses through diversification,” SuperRatings managing director Jeff Bresnahan said.

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Top Five Super Funds

(Balanced investment option)

1. Local Government Super Acc. Balanced Growth (12.8%)

2. BT Lifetime Super Emp. Balanced (12.4)

3. ANZ Super Adv. Managed growth (12.2%)

4. Plum, pre-mix moderate (12.1%)

5. Maritime Seafarers Accum. Balanced (11.9%)

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742