with Peter Dallimore Peter Dallimore is a volunteer Financial Counsellor at the Bribie Island Neighbourhood Centre

Financial advice. Superannuation. Retirement funds. Finance. Bribie Island

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Tags: Financial advice. Superannuation. Retirement funds. Finance. Bribie Island

Keeping track of your super fund performance is well worthwhile to ensure that your fund manager is delivering good returns when compared with the industry at large. Your super fund’s long-term investment returns, together with your super contributions, are key ingredients to a healthy retirement balance.

Your super fund’s investment performance can change over time depending on what is happening in the investment markets. Check early in the year and again midyear after you receive your fund statements and when the latest comparison tables are available from industry analysts such as SuperRatings and Canstar. Two things stand out in the 2018 ratings. Firstly, Industry Funds dominate the list of top performers and super returns for 2018 were generally well down compared with previous years.

According to a superannuation rating company Chant West, for 2018, the median investment return for growth funds was 0.8% compared with the almost 9% pa achieved over the previous nine years. Chant West’s senior investment manager, Mano Mohankumar says: “The 2018 result doesn’t come as a surprise given the stellar run funds had experienced since early 2009. Leading into 2018, the median growth fund had averaged close to 9% over the previous nine years and asset managers were saying that most asset sectors were fully priced or close to it, so a flat or negative year was certainly on the cards.

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“The important thing for members to remember is that growth funds are generally designed to beat inflation by 3.5% a year, which translates to about 6% per annum over the long term, and they’ve succeeded in beating that objective over the medium and long term.” Mohankumar further states that the “power of diversification was clearly evident in 2018. When you consider that the Australian share market fell 3.1% and international shares 7.5%, the median growth fund was still able to eke out a positive return.

That’s because, while these funds do invest substantially in shares, they also invest in a wide range of other asset sectors including unlisted assets and traditional defensive assets such as bonds and cash, all of which produced positive returns for the year.” Mohankumar observed that the better performing funds in 2018 were those that had relatively higher allocations to bonds and unlisted assets, in particular, infrastructure, property, and private equity, at the expense of shares.

Chant West flagged that some growth funds delivered negative returns, with the worst performer losing 2.5% in value during the 2018 calendar year. So check how your fund has performed over the last few years against the 9-year median growth fund return of 9% pa and 0.8% for the 2018 year. If your fund is lagging behind decide whether or not to roll it into a higher performing fund.

If you have super in more than one fund, take the opportunity to consolidate the different funds to a single fund manager with a good long-term performance record. Consolidation can also significantly improve returns by reducing multiple charges for fees. If you do consolidate super funds, make sure to check the insurance implications.



Peter is a Registered Financial Counsellor at the Bribie Island Neighbourhood Centre. He can be contacted through the Centre on 3408 8440 or by Email at [email protected]. You can make contact if you are experiencing financial hardship or would like general information on financial matters. The service is free.

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A highly successful sales and leadership career working in a number of different and very competitive industries. Engaging with decision makers at all levels in business and government. Three decades employed by corporations, SME businesses in senior roles and almost twelve years operating as a freelance contractor has equipped me well for all aspects of business. Whether leading and mentoring sales teams, or in a direct sales role I enjoy the challenge to meet and exceed expectations. Making a real and tangible difference in either a team environment or as an individual is an important personal goal I have consistently achieved throughout my career. In all of my business and personal dealings over the years there is one issue that stands out above all others - communication. Excellent communication skills creates trust, helps with mutually beneficial outcomes and above all cements long lasting positive relationships. I strive everyday to communicate effectively with the people I encounter.