Surging stock markets in December, both in Australia and overseas, have contributed to the strong results for Australia's superannuation funds over the past six months revealed in the final figures for 2010 from SuperRatings.
After finally reversing the negative results of both the 2007-‘08 and 2008-‘09 financial years with a 9.8% gain for 2009-‘10, Australians have seen their super funds continue to grow, with another 7.5% being added in the past 6 months, according to Sydney-based SuperRatings CEO Jeff Bresnahan.
The gains once again have been driven largely by the equity markets, with Australian shares adding 3.7% to the average balanced option and international shares, thanks to a steady Australian dollar, recording a net return of close to 4% for the month.
But there is still plenty of nervousness within the funds, according to Mr. Bresnahan, where the hope is that this strong start to the financial year can be followed with a solid second half, unlike last financial year where the strong first six months of 11.9% was immediately followed by losses of 2.3% over the ensuing six months.
Notwithstanding the positive news on returns, medium term results are still in the red with Australians seeing their super decrease by approximately 6.5% over the past three years. However, longer term results show solid growth with Australians' super balances increasing by 16.5%, 55.4% and 61.3% when compounded over the last five, seven and 10 years respectively.
Michael Bailey is editor of I&T News, the weekly newsletter of
Investmentmagazine in Sydney.