Australians with super received an average of ten thousand dollars in returns on their investment in 2015. This was the fourth year in succession that superannuation funds delivered positive returns for their investors. It was, however, the lowest return since 2011. We all know that since the end of the mining boom in Australia things have been fairly gloomy in terms of economic growth. It is to be expected that returns on the stock market and other financial markets will be poor in comparison to more recent years. Can super funds keep delivering returns?
Growing concerns over global markets and the Chinese economy do not paint a pretty picture for super investors. A negative growth year cannot be far away and many in the industry expect it sooner than later. Will 2016 be that negative return year? Experts in the market are slightly more optimistic and are predicting a similar return to that of 2015.
The typical average portfolio for super fund investors in Australia is around twenty seven percent in Australian shares, the same in international shares, twenty percent in bonds, ten percent in cash and the remainder mixed up in infrastructure, property and alternative stuff. The average super balance for an Aussie is around sixty four thousand dollars. A five point three percent investment returned some three thousand four hundred dollars on average; with the rest made up of their employer’s contribution.
Zac Zacharia from Centra Wealth Group, in a recent report on the news.com.au website reckons that a once every seven year negative return is in line with market expectations. The more conservative funds rarely experienced a negative return and he called upon those approaching retirement age to be more proactive in their superannuation situation. Examining where your money is invested is a wise choice, in his opinion.
Growth in Europe, where governments are injecting money, in a similar fashion to what was happening in the United States economy a few years ago, means that the future is not all bad. More people need to get into super now to make sure that they have that nest egg for their lengthy retirement years. The longer that self employed people put off a commitment to investing in their own super the less they will have when it really matters. Superannuation has, overall, been a revelation for Australian savings and investment rates. We need everyone to make sure that they are benefitting from the current generous superannuation settings.