Superannuation funds continued to face challenging market conditions in February, with the median Balanced Option down 0.5% in February. This is the fifth negative month for the financial year so far, with the financial year-to-date return falling to -1.6%. Eight months into the financial year, it is becoming clearer that returns will not repeat those of the past three years, where the median Balanced option had recorded double digit returns by this stage of the financial year. A further concern will be whether we see a positive median return by the end of the financial year.
“The 2015/16 financial year has been presenting a range of challenges to superannuation funds and their members, with most funds recording a small loss for the first 8 months of the year.” SuperRatings founder Jeff Bresnahan said. “A key challenge for members remains growing their balances to meet their retirement needs. This involves working to maintain exposure to growth assets that have performed well over the long term, while ensuring risk is minimised.” he said.
Australian markets continued to face headwinds in February, with the ASX 200 Accumulation Index down 1.8% for the month. Telecommunications, Technology and Financial stocks fared poorly, while Resources and Materials stocks clawed back some of their losses in January. The MSCI World Ex-Australia Net TR Index was down 1.7% for the month, which was well ahead of the 5.9% fall recorded in January. However, unlike recent months, the Australian Dollar held its ground and did not have a material impact on returns. The median International Share option was down 1.3% for the month, but given the rise in the Australian Dollar in March, the currency is expected to detract from returns rather than cushion any volatility.
Median superannuation fund Balanced Option returns as at 29 February 2016 are outlined below:
| Period | Accumulation Returns |
| The Month of February 2016 | – 0.5% |
| Financial Year return to 29 February 2016 | – 1.6% |
| Rolling 1 year return to 29 February 2016 | – 2.3% |
| Rolling 3 year return to 29 February 2016 | 7.4% p.a. |
| Rolling 5 year return to 29 February 2016 | 6.8% p.a. |
| Rolling 7 year return to 29 February 2016 | 8.7% p.a. |
| Rolling 10 year return to 29 February 2016 | 5.1% p.a. |
