Retirement
How did your super fund perform in 2020?
Despite the COVID-19 pandemic, superannuation funds have delivered a positive return for members over the 2020 calendar year, new research has revealed.
How did your super fund perform in 2020?
Despite the COVID-19 pandemic, superannuation funds have delivered a positive return for members over the 2020 calendar year, new research has revealed.
Results collated by Chant West have shown median growth funds — which have 61 to 80 per cent in growth assets — ended the year up 3.7 per cent.
While short of the 14.7 per cent members gained in 2019, Chant West applauded the funds’ ninth consecutive positive calendar year and the 11th in the past 12 years where members have enjoyed growth.
“If we take ourselves back to late March, the prospect of finishing the year up 3.7 per cent would’ve been inconceivable,” Chant West senior investment research manager Mano Mohankumar said.
“Over February and March, major sharemarkets took a beating and the median growth fund plummeted 12 per cent.
“Markets rallied from that point, however, and growth funds rode the rally to surge 15.5 per cent over the remaining nine months of the year.”
The superannuation specialist opined that 2020 has highlighted the importance of patience during volatile times.
“Members who sat tight generally did OK,” Mr Mohankumar said.
“Sadly, there were many others who panicked when markets fell and switched their investments to cash or a more conservative option.”
He explained that had investors swapped to more conservative options, they would have missed out on the rebound.
“And, of course, there were those who withdrew their money from super completely. That’s understandable to deal with temporary hardship, but they’ll now be faced with making up considerable lost ground,” he said.
Diversification, Mr Mohankumar stressed, is another important lesson learnt in 2020.
“Growth funds have their investments spread across a wide range of asset sectors, and that works to cushion the impact during periods of sharemarket weakness, as we saw in February and March,” Mr Mohankumar explained.
“At the same time, they still have a sizeable allocation to listed shares — about 54 per cent on average — so they’re able to benefit when those markets perform well, as we saw from April to December.
“The better-performing funds over the full year were generally those that had a higher allocation to international shares, particularly those with a ‘growth’ style bias. Holding bonds rather than cash would also have helped, as would a relatively low exposure to listed infrastructure and listed property.”
About the author
About the author
Superannuation
Top 5 members satisfaction super funds revealed
The COVID-19 pandemic has seen superannuation satisfaction reach record highs, new research has revealed. ...Read more
Superannuation
New super laws divide industry groups
Your Future, Your Super legislations have reached Parliament, dividing opinions among key stakeholders. ...Read more
Superannuation
ISA applauds Minister Hume for opposing super for a home plan
The government has no immediate plans to allow Australians to access their superannuation to buy a home, Jane Hume has confirmed, despite ongoing calls from backbenchers. ...Read more
Superannuation
Your Future, Your Super hits Parliament
The controversial Your Future, Your Super reform package has been introduced to Parliament, paving the way for the continuation of the government’s fierce debate with the super sector. ...Read more
Superannuation
Super funds deliver slim January gains
Superannuation funds have made ‘a small but positive result’ at the start of 2021, although the pandemic still poses a significant risk to future returns, new research has revealed. ...Read more
Superannuation
Age pension to explode if super guarantee is ditched: ISA
Failing to lift the superannuation guarantee to 12 per cent will inflate Australia’s aged pension bill to $33 billion by 2058, and may lead to tax hikes to meet the bulging burden, new research has ...Read more
Superannuation
Why it’s the right idea but wrong time to lift the SG
As Australia surfaces from its first economic recession in almost three decades, the focus should be on creating new jobs instead of lifting the superannuation guarantee, an accounting body has said....Read more
Superannuation
‘RBA helping the government knock off’ super increase: Keating
Former Prime Minister Paul Keating has accused the Reserve Bank of Australia of laziness, opining that the bank is aiding the government in knocking off the legislated superannuation increase at the...Read more
Superannuation
Top 5 members satisfaction super funds revealed
The COVID-19 pandemic has seen superannuation satisfaction reach record highs, new research has revealed. ...Read more
Superannuation
New super laws divide industry groups
Your Future, Your Super legislations have reached Parliament, dividing opinions among key stakeholders. ...Read more
Superannuation
ISA applauds Minister Hume for opposing super for a home plan
The government has no immediate plans to allow Australians to access their superannuation to buy a home, Jane Hume has confirmed, despite ongoing calls from backbenchers. ...Read more
Superannuation
Your Future, Your Super hits Parliament
The controversial Your Future, Your Super reform package has been introduced to Parliament, paving the way for the continuation of the government’s fierce debate with the super sector. ...Read more
Superannuation
Super funds deliver slim January gains
Superannuation funds have made ‘a small but positive result’ at the start of 2021, although the pandemic still poses a significant risk to future returns, new research has revealed. ...Read more
Superannuation
Age pension to explode if super guarantee is ditched: ISA
Failing to lift the superannuation guarantee to 12 per cent will inflate Australia’s aged pension bill to $33 billion by 2058, and may lead to tax hikes to meet the bulging burden, new research has ...Read more
Superannuation
Why it’s the right idea but wrong time to lift the SG
As Australia surfaces from its first economic recession in almost three decades, the focus should be on creating new jobs instead of lifting the superannuation guarantee, an accounting body has said....Read more
Superannuation
‘RBA helping the government knock off’ super increase: Keating
Former Prime Minister Paul Keating has accused the Reserve Bank of Australia of laziness, opining that the bank is aiding the government in knocking off the legislated superannuation increase at the...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
