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SelectingSuper Media Release - Monday 13 March 2017

 
SUPERANNUATION PERFORMANCE - JANUARY 2017

The SelectingSuper workplace default option MySuper Index decreased slightly by 0.1% in the month of January. The small negative result in the first month of 2017 was underpinned by negative returns in equities along with uncertain fixed interest market.

The monthly drop was on the back of strong performance in the final months of 2016 and brings the 12 month annual return to January 2017 to a very strong 9.5%. Highlighting this strength, over 40% of all workplace default funds achieved annual returns over 10%.

 
SelectingSuper MySuper Index - Monthly Returns

 
The performance over multi-year time periods continues to benefit from positive impact of the high returns since 2011. Reflecting this, three year rolling MySuper returns are 7.2% pa and five year returns are 9.3% pa. The longer term 10 year return is a more modest 4.7% pa, although this period incorporates the full effect of the GFC and is overlaid by a lower inflation environment.
 
 
SelectingSuper MySuper Index - Long Term Returns

 
On an annual basis Australian equities, often the largest asset class in many balanced funds, contributed with a very solid 17.3% return. Similarly the contribution of hedged international equities was 17.4% for the twelve months to January. The strengthening of the Australian dollar over the 12 months resulted in a lower 9.5% return for unhedged international equities.

Property, which has provided a significant positive impact on investment outcomes over recent periods dropped back to a more modest contribution of 6.5%. The infrastructure index continues to reflect strong returns in that segment over the medium term.

The movement in the yield curve in recent months has resulted in fixed interest returns dropping back both domestically and internationally.

In net terms this means funds with relatively high exposure to equities, and infrastructure outperformed in the 12 months to December. Similarly funds with relatively larger holdings in fixed interest in the period underperformed.

 
Financial Market returns to January 2017
 

 
Leading products
The top 5 performing products in Workplace, Personal and Retirement markets over the 12 months to January 2017 are as follows:
 
WORKPLACE SUPER (MYSUPER/DEFAULT)
CFS FirstChoice Lifestafe (1970-1974) 16.5%
RBF Investment Account - MyPath 1970-1974 13.7%
Lutheran Super - Balanced 13.1%
Hostplus - Balanced 12.9%
ANZ Australian Staff Super - Balanced Growth 12.7%
 
PERSONAL (BALANCED)
FirstChoice Personal - FirstChoice Multi-Index Balanced 13.1%
Rio Tinto Staff Super Personal - Growth 11.6%
Catholic Super Personal 11.5%
Mercer PS - Non Mercer Balanced Value Style 11.5%
Cbus Personal Super - Growth (Cbus MySuper) 11.5%
 
RETIREMENT (BALANCED)
Lutheran Super Pension - Balanced 14.6%
FirstChoice Pension - FirstChoice Multi-Indexed Balanced 14.4%
MyLife MyPension - Moderatively Aggressive 13.9%
RBF Account Based Pension - Balanced 13.4%
Cbus Super Income Stream - Growth (Cbus Choice) 13.4%
 
Segment Performance

Regarding the market segments, the gap between not-for-profit (NFP) funds and Retail funds within the Workplace sector continues. The 12 month return gap has increased to 110 basis points in favour of NFP funds. This increase reflects the relatively lower performance of Retail funds in January underpinned by negative returns in listed equity markets.

The long term 5 year segment gap is 130 basis points in favour of NFP funds.

 

Stephen Fay, Head of Superannuation Research at Rainmaker Group is available for interview.

For media enquiries, please contact:

Stephen Fay
Phone: 02-8234 7500
Email:  stephen.fay@rainmaker.com.au

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