Super stays positive

Your super statement will be making its way to your letterbox shortly, but chances are you won't like what you see.

Superannuation growth funds delivered a small positive median return of just 0.5% for 2011-12, according to Chant West.

This is a significant drop on the healthier returns of 10.4% in 2010 and 9.2% in 2011. Interestingly, Chant West director Warrant Chant says the result is not bad considering the markets. "The 2012 financial year was a tough one for funds to navigate because there were opposing forces at work that shifted market sentiment to and fro and prevented any clear pattern emerging," he says.

"On the one hand, the global economy was clearly working its way out of the GFC-induced trough, although the pace of growth was slow and far from uniform. But against that there was the negative sentiment associated with the debt crisis in Europe, where successive bailout packages just seemed to buy a little time before the next scare emerged either in Greece or, more recently, in Spain.

"Taking all that into account, a small positive return is probably not a bad result. Taken together with the 2010 and 2011 results, the three-year average is now 7%pa, which is ahead of the long-term expected return and well ahead of inflation, which has averaged about 2.6% a year over the period."

Of the 10 top-performing growth options, seven are not-for-profit funds, says Chant West, with QSuper Balanced having the highest return of 6.4%.

Of course, your super fund's performance will depend on where you're invested. The poor returns of growth super funds are the result of their large exposure to Australian and international shares, which returned -7% and -0.5% respectively.

"If fund members have been shrewd enough to shift their superannuation money into fixed interest, cash or property, then their returns will now be much higher than these lacklustre overall averages," says SelectingSuper.

Of the traditional asset sectors, Australian and international bonds (hedged) were the strongest performers, returning 12.4% and 11.6% respectively, says Chant West, while listed property also had a positive result. Australian REITs grew 11% and global REITs were up 8.3%.

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