Most Australian superannuation funds may be on track to post double-digit returns this financial year, after returns jumped in March.
The improved outlook is after median balanced option funds (which covers the majority of funds) rose 2.9% in March, after a sedate 0.8% increase in February, according to figures from SuperRatings .
A solid month for the Australian market helped; it was up 4% in March.
The improvement in March, after the sluggish start to the year, has seen funds build on a solid six months to December when they were up 12%.
Now the rise is 14% for the first nine months of the 2010 financial year..
Last financial year super funds on average lost 12.9% which followed on the 6.4% slump for the year to June 2008.
Over the two years to June 2009 the fall was around 20%, so the expected rebound this financial year will go a long way to reclaiming much of the lost ground, but not all.
According to SuperRatings, that 12% rally in December 2009 half year was the largest half year result for super funds since the introduction of compulsory super in 1992.
Now SuperRatings says that with only three months remaining in the 2010 financial year, "Australia’s superannuation funds are poised to provide members with double-digit returns” .
SuperRatings managing director, Jeff Bresnahan, said in the statement that, “Assuming the trend continues, this would lead to an unprecedented five double-digit returns within the last seven years and be a substantial turnaround from the losses members faced just 12 months ago”.
Members are benefiting from the increased exposure to Australian shares in their funds.
"The Australian share market continues to be the driving force, with the SR50 Australian Shares Index returning 5.22% in March and 38.92% for the past year," SuperRatings said.
"In addition to the strong share markets, many super funds have clearly enjoyed additional benefits as the median balanced option increased its exposure to the Australian share market from 29.3% at the beginning of the recovery in March 2009, to a current exposure of 30.5%, thus creating a dual benefit for many Australians."
The median “balanced” option superfund, containing 60% to 76% growth assets, is held by 80% of Australians.
Another super research agency, ChantWest, also released their growth figures yesterday showing a similar growth pattern.
Median growth funds rose 3% in March from 0.9% in February.
