THE average Australian superannuation fund lost money in 2011 due to the sharemarket's poor performance, with analysts expecting a 2 per cent decrease in median "balanced" funds.
Conservative funds and cash funds which allocate money to defensive assets such as fixed interest and bonds, where returns are normally lower outperformed high-growth funds.
Paul Saliba, chief investment officer at wealth management firm Lachlan Partners, expects the outlook for 2012 to be similar to last year, with low-risk assets outperforming the sharemarket because of the risks facing the global economy.
"There is a clear risk for equity returns in a world of weak economic growth, deleveraging of both consumers and governments worldwide," he said.
The debt crisis in Europe was a "dire risk", he said, and "unless something changes and on all reports it's hard to see how it can change with any speed then investors are going to be gun shy".
While government bonds were the biggest gainers last year, Mr Saliba said corporate bonds should do well this year as people realised that "companies are not going to fail en masse".
According to superannuation research and consultancy firm Chant West, the negative super returns of 2011 compared with positive returns of 4.7 per cent in 2010 and 15 per cent in 2009, but were far better than losses of 21.5 per cent during the late-2008 global financial crisis.
"We can say overall the median growth [category] has only lost 2 per cent and that is because growth funds are well diversified across a number of growth and defensive asset classes," research manager Mano Mohankumar said.
"Our [average] conservative fund would have actually had a positive return for the year of 3 per cent. The main reason for that is that they have a higher weighting to bonds, which were the strongest-performing asset class of the year."
Conservative funds had only about 20 per cent of assets exposed to shares, which were considered high-risk assets, he said.
Salvador Saiz, investment research manager at SuperRatings, expects the sharemarket tide to turn this year.
"Markets in December finally directed their attention towards the continued stream of positive economic data from the US," he said. "To date, much of the better than expected news on US corporate earnings and GDP growth had been overshadowed by events in Europe.
"While we don't expect markets to shoot the lights out in 2012 and members should moderate their expectations on returns improving sentiment could be a positive catalyst in 2012."
Most Australians have their super invested in the default "balanced" funds because they have not selected an alternative. These funds usually have 61 to 80 per cent of assets exposed to high-growth assets such as shares.