Your super fund took a big hit last month

The string of dismal returns from Australia’s biggest superannuation funds has continued, with funds losing a further 0.81% in March. This takes total losses since the start of July 2007 to 4.7%.

According to the data from super research company SuperRatings, March represented the fourth consecutive month of losses for the average Australian’s balanced super option. According to SuperRatings managing director Jeff Bresnahan, the likelihood of positive returns in April will not prevent nearly all balanced options showing negative returns at year end, some for the first time in their 20-year history.

But super fund members should keep things in perspective. Returns over three, five and seven years are still quite strong, the average fund producing returns of 9.3% a year over the last three years and a whopping 11.2% over the last five years.

With global sharemarkets taking a beating in the last 12 months, super fund members whose portfolios favour fixed interest and cash investments have done best; the average cash option fund is up 5.2% in the last 12 months, compared with a 6.3% decline for investors in the average Australian shares option fund. But over the last five years, the cash option is up just 4.8%, compared with a gain of 16.9% for the Australia shares option.

The message – super fund members always need to take a long-term view.