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SelectingSuper Media Release - 4 December 2013

Super returns climb to 16.1% for year ended October 2013

Super fund returns for the 12 months to end October have jumped to 16.1% reveals latest figures from the SelectingSuper workplace rolling 12 month default option index.

The improvement means super funds are delivering their best returns in three and half years and are ahead of the pre-GFC glory days when returns averaged 15% pa, noted Rainmaker the research group that conducts the SelectingSuper performance surveys.

"The results are so high because the ASX accumulation index delivered 25% over the 12 months and international shares a massive 38% despite the AUD increasing in value relative to the USD by 2% during the month," said Alex Dunnin, Rainmaker executive director of research and compliance.

In contrast, domestic and international bonds again returned 2% and 4% respectively. Direct property maintained its 9% result but A-REITs have fallen further posting 13% returns. Cash remained steady on 3%, added Dunnin.

The SelectingSuper index furthermore showed super funds to have returned 8.1% pa over three years, 7.2% pa over five years and 6.7% pa over 10 years.

Despite the strong average returns, Dunnin said an emerging concern in the lead up to the MySuper January 2014 start date is that the segment gap between not-for-profit and retail workplace super funds has blown out to 2.7 percentage points as while not-for-profit funds returned 17.0% retail funds (ie corporate master trusts) achieved 14.3%.

"The retail superannuation sector is launching some very innovative MySuper products but for these to really impact the market the innovations they contain regarding their web-based technology will need to matched by robust investment returns. If these new products can deliver on this front it will be the superannuation story of 2014," said Dunnin.

The top five workplace super funds (by default options) in the SelectingSuper survey over the 12 months were ArcTOWER with 20.8%, Lutheran Super with 20.2%, VISSF with 19.9%, REST with 19.7% and Maritime Super with 19.5%.

The top five personal super funds (by balanced options) over the 12 months were HOSTPLUS with 21.0%, Mercer with 20.9%, IOOF Portfolio Service with 19.8%, Perpetual Wealth Focus with 19.6% and legalsuper with 19.3%.

The top five public offer Retirement funds (by balanced options) over the 12 months were HOSTPLUS with 23.9%, Aon with 22.5%, REST with 22.0%, legalsuper with 21.9% and Energy Super with 21.0%.