If you’ve been following the never-ending stream of bad news in the media over the last year, you’d be forgiven for thinking the safest place to invest your retirement savings would be under a mattress.
But despite the Greek debt crisis, a general rout of commodity prices, a war in Europe and ongoing economic uncertainty in major economies, super funds have actually fared reasonably well this year.
According to SuperRatings, a superannuation research and comparison agency, strong performances from international shares and listed property boosted returns across Australia’s $2 trillion super industry.
The median international shares investment option returned 19.2 per cent for the year to June 2015, in part due to the magnifying effect of the falling Aussie dollar on international earnings.
And listed property also had a strong showing, with the benchmark ASX 300 A-REIT Index up 20.2 per cent for the year.
The strong returns from these asset classes also flowed through to balanced and MySuper investment options, where the majority of people have their money invested.
Balanced and MySuper investment options generate a diversified return for investors by investing their money across variety of asset classes, including Australian shares, international shares, property, fixed interest and cash. They are either the mandatory or recommended default investment for the majority of super funds.
The top 10 performing balanced options all generated returns of over 10 per cent for the year to June 2015, far outstripping the returns available through online savings accounts (currently around 2.5 – 3.5 per cent).
Top Performing Balanced Investment Options to June 2015
SuperRatings founder Jeff Bresnahan noted that not-for-profit super funds once again have a strong showing in the top ten this year, with the Commonwealth Superannuation Corporation Public Sector Superannuation Accumulation Plan (CSC PSSap) taking out the number one spot.
“It was also pleasing to note two small funds made the highest rankings this year, proving that size doesn’t matter when it comes to strong performance,’’ Mr Bresnahan said. Intrust and AustSafe both have assets of less than $5 billion, but produced strong returns.
Top Performing Investment Options (Overall) to June 2015
“The overall highest performing super fund options this year were international shares options, with favourable currency conversion rates adding further to their stand-out performance,” Mr Bresnahan said.
All of the highest performing funds this year had returns well above the 20 per cent mark, however, on a medium term basis their results were more in line with lower risk balanced option funds.
Main image: Chariots of Fire (1981)