Superannuation fund members finally have a reason to smile, after the average super fund gained 2.24% in March.
But Jeff Bresnahan, chief executive of research firm SuperRatings, says the March result is actually below expectations, given a mini sharemarket rally helped push local and international shares up by around 8%.
“Fund returns appear to have been impacted by a rising Australian dollar for hedged positions and the ongoing revaluations of unlisted assets,” he says.
While the return to black figures in March is welcome, returns remain firmly in the red over the medium term. According to data from SuperRatings, the rise in March means the average balanced superannuation fund is down 3.69% over the first three months of 2009 and 17.35% over the past 12 months.
Bresnahan has also highlighted big discrepancies opening up between the best and worse-performed funds. For example, of the balanced fund option (where the bulk of Australians have their super money parked) the best-performed funds are down 11.2%, while the worst-performed funds are down by 27.4%.
“The key issue for consumers is to not only understand why these differentials are occurring, but also to importantly understand the relativity of their own fund’s returns,” Bresnahan.
If your fund has consistently performed below the industry average, it is time to do some serious investigation as to the reasons.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
