Super fund return performance has fallen in April following a small positive return in March, according to research house SuperRatings.
The median balanced option fell by 1.1% in April, according to the research house, with the month marked by inflationary pressures and the Reserve Bank of Australia’s decision to increase interest rates for the first time since November 2010.
Greater volatility had seen increased pressure on fund returns, with the financial year return for the period ending 30 April 2022 estimated to be 1.2% and further pressure emerging in May, according to SuperRatings.
SuperRatings executive director, Kirby Rappell, said: “We have seen a significant pullback in super fund returns this financial year, with 2 months remaining. It is challenging to say whether super funds will end the financial year to 30 June 2022 in the red or the black at this stage, as it could go either way.
“However, we have seen funds continue to deliver above their investment objectives over the longer term which typically sit around CPI+3.0%. Sticking to a long-term strategy and blocking out short-term noise is as important as ever, with long-term performance being what really matters.”
Meanwhile, the median growth option declined by an estimated -1.5%. The fall in performance was lower for the capital stable option which invested more in defensive assets such as bonds and cash, with a decline of -0.7% estimated.
A fall in pension returns was also determined in April, with the median balanced pension option down an estimated 1.4%, similarly the median growth option fell by 1.6%, while the median capital stable option was down an estimated -0.8%.
There is a need for Australia’s superannuation funds to simplify their investment menus, according to the firm, given over a third of funds have more than 30 options, of which one or more are “arguably subscale”.
The research house is set to offer research ratings of superannuation funds for the first time amid growing demand from financial advisers.
Treasury is calling for submissions on its draft regulations in relation to the calculation of the proposed Division 296 tax.
Initially intended to offer a “simple, cost-effective” option for Aussies invested in default fund options, a super consultant has weighed in on what the scheme has actually done for members.
Add new comment