AUSTRALIA - The median balanced superannuation fund has fallen for the fifth consecutive month returning -1.8%, -4.9% for the September quarter and -3.8% for the past year, SuperRatings finds.
Funds exposed to growth assets were also down with the median growth fund (77-90% growth asset ratio), returning a decrease of -2.2% in September on the back of falling equity markets.
Though negative, the return on has outperformed both the Australian Shares option median return of -7.8% and the ASX300 Accumulation Index return of -8.7% over the past 12 months.
Super Ratings said this demonstrates the benefits and importance of diversification across both growth and defensive assets, in order to deliver returns in up markets and protect on the downside when markets fall.
Nevertheless, members are expected to continue moving to more defensive or conservative investments options in response to the uncertainty over European sovereign debt markets and the US outlook.
SuperRatings managing director Jeff Bresnahan said: "So long as markets remain unconvinced these issues have been addressed, as opposed to the temporary band-aid solutions being applied, then investors are going to seek the relative safety of assets such as highly rated government bonds. Therefore, defensive funds will continue to benefit from this pessimistic sentiment. I don't see this situation changing in the near term."