Superannuation funds have risen for a sixth straight month, reversing the falls of the preceding six months, according to figures released yesterday.
The superannuation measurement firm, SuperRatings said the boom in local and world markets since March had produced the latest monthly rise in August.
But the balances of retirement funds are still down from a year ago, the firm said in a statement yesterday.
The median balanced super fund rebounded 14.3% over the period, although it was still down 7.9% on average from August 2008.
"The surging Australian share market, including the listed property sector, sits behind a sustained superannuation fund rally which has now extended positive returns to the sixth straight month," firm CEO, Jeff Bresnahan said in a statement yesterday.
"This six-month streak is the exact opposite to the previous six months, where six consecutive negative returns were recorded."
"Just as members receive their 2008/09 member statements, where balanced returns ranged from a best of minus 7.6% to a worst of minus 24.6%, the median fund has already recovered 6.8% in July and August alone.
"On a rolling 1 year basis (to the end of August), the median result is down just 7.9% whilst the 3 year rolling per annum result looks like it will finally break out of its negative position next month, with the result to the end of August holding at a marginal negative 0.19% per annum," he said.
Between September 2008 and February this year, there were six consecutive monthly negative returns totalling 18.5%.
Since the Australian sharemarket hit a five-and-a-half year low in early March this year (as did other markets around the world), the All Ords rose by 44% to the end of August.
It has continued rising into September and extended the surge to around 50% with seven trading days to go.
The median balanced superannuation fund rose by 3.13% in the month of August and increased by 7.49% in the three months to August.
(The median balanced superannuation fund has holdings of 60% to 76% in growth style assets such as equities, and accounts for about 80% of Australians’ retirement savings.)
Despite the gloom on financial markets over the past two years, most employees did not change their superannuation portfolios to a more conservative setting, unlike those who had ended their working life, Mr Bresnahan said.
"The short answer is that for most pre-retirees they don’t appear to be concerned, with just 3.3 per cent of assets being moved from an aggressive portfolio to a more conservative portfolio in 2008," he said.
"In contrast, retirees were much more active with over 12 per cent of assets moving to conservative options in 2008."
Retirees have around 14.5% of their superannuation in cash options compared to 3.7% for pre-retirees, Mr Bresnahan said.
"So, in essence, these significant short-term movements in markets certainly appear to be affecting retirees more so than those still generally apathetic pre-retirees, as poor market timing can significantly impact benefits."
The strong Australian dollar has, however, cuts returns for funds invested offshore.
