AUSTRALIA - The median growth super fund returned 6.3% annually over the past five years, according to Intech.
Over the past decade, Intech added, the median growth super fund returned 8.9% annually, exceeding the corresponding CPI-measured increase in inflation by 6.5% per annum.
Intech noted that in the first half of the surveyed five-year period sharemarkets delivered negative returns, -2.0% per annum ending 31 March 2003, but reversed this trend in the second half, with a strong rise of 15.2% to 30 September 2005.
The top performing fund in the first half was REST Core which recorded a return of 4.1%. But the same fund ranked 58th out of 65 funds during the latter period with a return of 14.0%.
The reverse was experienced by INVESCO Growth and BT Active Balanced, which performed poorly during the first half, but well during the ‘good’ period.
Twelve of the funds surveyed had a 20-year track record, and the research revealed that over this period, the median growth super fund returned 10.5% annually, exceeding CPI by 6.7%.
This was a healthy return despite adverse events such as the 1987 stockmarket collapse in which the Australian sharemarket lost more than 40% of its value, the recession of the early 1990’s, the September 11 terrorist attacks and the strong bear sharemarkets of earlier this decade, Intech surmised. The findings were detailed in the Intech Super Survey, which measured the performance of 200 superannuation funds across five risk categories on a net of tax and investment-related fees and expenses basis.
This week's edition of Professional Pensions is out now.
Nearly 60% of UK employers consider defined contribution (DC) master trusts to be the "most suitable" pension fund for their employees, according to research by Buck.
Companies which have tried to dodge their pension duties by changing their identities are being "hunted" by The Pensions Regulator (TPR) in a crackdown on non-compliance with auto-enrolment (AE).
Removing liquidity restrictions would enable DC funds to capitalise on the potentially higher and safer returns that DB schemes have benefitted from, says Patrick Marshall.