Superannuation funds might end the year in negative territory for the first time since 2011 because of the recent market volatility, financial advisory firm Dixon Advisory said.
According to Dixon’s head of advice, Nerida Cole, super fund members should prepare themselves for more volatility which would be driven by the ongoing US-China trade dispute, Italian budget crisis, rising interest rates in the US, slowing in the Chinese economy and a slowing Australian property market. And on top of that would come the complexity of Brexit, she said.
“The big detractors this year were Asian and European share markets – and people with more of their money in these regions would be facing bigger drops,” Cole noted.
“If we see markets continue to fall over the next two weeks – super funds could end up in negative territory.”
Looking ahead, Cole reminded investors they should take a more cautious approach towards investments and check how their super was invested, including spread between shares and cash and whether this mix was right for them.
Investors should also pay a closer attention and review their long-term returns, taking into account the Productivity Commission’s indications that the average valanced funds would return around six per cent per year over the last 10 years.
“In short, there is no need to settle for a fund that’s not working for you and certainly no need to settle for an underperforming fund,” she said.
Australia’s second-largest super fund has confirmed it is expanding its presence in the UK following significant investment in the region.
A member of the super fund has approached ASIC to investigate potentially misleading or deceptive representations by UniSuper regarding the holdings of its sustainable portfolios.
The median growth fund delivered 1.9 per cent in March, adding to the “stunning” rally that has seen super funds gain 11 per cent since November.
Vanguard has affirmed its support for the current super performance test, emphasising the importance of keeping the process straightforward.
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