Median superannuation funds squeezed out a gain in June, marking the fourth consecutive month of increases.
The 1 per cent monthly increase, however, is overshadowed by the 13 per cent drop for median growth superannuation funds in the year to the end of June, making it the worst year since it became mandatory, according to research group Chant West.
June's result "was driven by stronger share markets and has certainly provided some optimism going into the new financial year," said Chant West principal Warren Chant.
The share market has staged a rally since March 9, with the S&P/ASX rising nearly 30 per cent to 4062.2 on June 12 before giving up some gains. Yesterday the sharemarket closed at 4050.7.
"However, concerns remain about the health of the global economy and the speed of any recovery. Share market performance has been volatile so far in July, with investors reacting sharply to any economic news, positive or negative," Mr Chant said.
Chant West defines growth funds as those with 61 to 80 per cent of their allocation in growth assets, the default selection for most funds.
Member-run industry funds lost 11.2 in the year to June, while retail master trusts fell 13.8 per cent.
Not so fast
Rival superannuation company SuperRatings said it had not yet released its June results nor its final, end of financial year data because not enough funds had yet released information for the report.
Only over half of the funds - 55 per cent - have reported their end of the year performance so far, SuperRatings said, ''well below'' expectations this late in the month.
''It would appear that among those yet to declare final rates are a number of funds expected to feature predominately amongst the best performers for the year,'' said SuperRatings managing director Jeff Bresnahan.
''The delay is due to a multitude of things, but primarily relates to the not for profit sector,'' he said, including the need to finalise revaluation on unlisted assets.
After such a poor year, superannuation funds needed more certainty about tax implications ''in a negative earning environment,'' he said.
Member protection costs to the fund ''balloon in negative investment times'' which means funds are likely running interim reviews.
Mr Bresnahan predicted a ''massive range between the best and worst balanced options'' - possibly as wide as 17 per cent when the full data is available, almost as much as the 18.4 per cent range seen at the peak of the financial crisis in the 2007-08 year but narrower than the 11.2 per cent seen in 2001-02 downturn.
''The recent wide ranging spread of investment returns should be of considerable concern to consumers who effectively believe that balanced funds behave in a similar manner, which is clearly not the case.''
Earlier in the month, SuperRatings estimated that the median balanced super fund had lost 13 per cent in the past financial year.
Asset classes
"While there are differences between funds' investment strategies, even within the same risk category, most of their performance is driven by what happens in the main investment markets, notably the Australian and international share markets," the Chant West report said.
The S&P/ASX 200 lost 24.4 per cent in the year to June, while international hedged shares fell 26.6 per cent.
Of the 13 asset classes tracked by Chant West, three - Australian bonds, international bonds, and cash - posted a gain in the year to the end of June.
Australian bonds rose 10.8 per cent and hedged international bonds grew 10 per cent. Cash increased 5 per cent.
Hedged international listed property lost 43.4 per cent in the year, while Australian property dropped 42.1 per cent. Unlisted property dropped 12.3 per cent.
"In the case of unlisted property, it is generally accepted that valuations tend to be conservative and to lag behind what is happening in listed markets," the report said.
"Nevertheless, unlisted property is not immune to the downturn, and values have fallen by 8.5 per cent in the six months to June 2009."
czappone@fairfax.com.au
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