Super gains despite the pains

July 21, 2016

The market uncertainty over the UK's Brexit from the EU didn't stop Australian superannuation funds ending the 2015-16 financial year in positive territory. According to the latest data from Chant West, it looks set to be the seventh consecutive year of positive growth.

Chant West director, Warren Chant says this year's return will likely be modest compared to the previous three but it's still good result in an environment of low economic growth.

"Funds are so well diversified across a wide range of growth and defensive asset sectors, they can successfully smooth out returns when listed markets are struggling," Chant says. "This year has been another great example of the benefits of diversification."

Preliminary performance estimates show Mercer Super's Growth fund returned 2.1% for the financial year; final returns will be available on 18 July.

Chant says that, while all eyes will be on this year's results - it's important to look at performance in a longer-term context.

"And there's no denying that super fund members have enjoyed a terrific run in recent years," Chant says. "The last negative financial year most people experienced was back in 2008/09 when the GFC ravaged performance."

Since then, he says, there have been six consecutive positive years - and this one looks certain to be the seventh.

The total return from Australian Shares (including dividends) for Australian investors over the year to 30 June 2016, was 0.9%.  Global Equity markets returned 0.4% in unhedged $A terms, and -1.4% in hedged $A terms.

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* Reported average result for funds with 61 to 80% of their investments in growth assets.

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