The 2013/14 financial year was another outstanding one for super funds, with strong share markets driving the median growth fund (61 to 80% invested in growth assets) up 12.8% – the second straight positive double digit return.
The top-performing fund for the year was VicSuper which returned 15.8%, closely followed by Telstra Super. Even the worst-performing fund in the growth category gained a healthy 9.6%.
Chant West director, Warren Chant, says: “We’ve now seen five consecutive positive years – 10.4% in 2009/10, 9.2% in 2010/11, 0.5% in 2011/12, 15.6% in 2012/13 and 12.8% in the year just ended. That’s a cumulative increase of about 58%, or just under 10% per annum. It’s particularly impressive given that the typical longer-term objective for growth funds is to return between 3% and 4% a year above the inflation rate, which translates to an annual return of between 6% and 7%.
“The performance over the past few years has gone a long way towards erasing the dark memories of the GFC. From the low point in early 2009, growth funds have put on 70%. They now stand about 25% above their pre-GFC high achieved in October 2007. In fact all five of our fund risk categories – even the more aggressive All Growth and High Growth categories which suffered the most during the GFC, now sit comfortably above their pre-GFC levels.
“This strong bounce-back shows how resilient and forward-looking markets are, because it’s been achieved despite a patchy economic background. It all goes to show how dangerous it is to attempt to ‘time’ investment markets. If you lost your nerve during the GFC and switched to a more conservative strategy you’d have crystalised your losses and missed out on this robust recovery.”
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