The unrelenting rise and rise of superannuation continues with the latest APRA figures revealing there is now a record $1.84 trillion in Australian super accounts.
Contributions to funds with at least $50 million in assets over the March 2014 quarter were $22.7 billion, up 9.1 per cent from the March 2013 quarter ($20.8 billion). Total contributions for the year ending March 2014 were a massive $93.5 billion.
At the same time, strong returns from listed shares and, in particular, listed property propelled super funds higher in April, according to ratings agency Chant West. With the end of the financial year almost upon us, Chant West is predicting that superfunds will enjoy a fifth consecutive positive annual return – most likely in double digits.
In April, median growth funds (61 to 80% allocation to growth assets) gained 0.8% says Chant West. This was the eighth positive return in the 10 months of the year to date, and it pushed the financial year to date return to 11.4%.
The Chant West research also reveals that the best returns were delivered by listed property in April, with the highly volatile Australian and global REITs returning 5.6% and 3.9%, respectively. Listed assets in general performed well, with Australian shares up 1.7% while international shares gained 0.7% on a fully hedged basis, and 1% unhedged.
Chant West director, Warren Chant says: “Since December 2011, growth funds have delivered 23 positive monthly returns out of 28, mainly on the back of recovering share markets in Australia and overseas. Since the GFC low point at the end of February 2009, growth funds have now advanced 67% and stand about 23% above their pre-GFC high reached at the end of October 2007.
“During the month, the US economy continued to show signs of strengthening with improved employment and consumer spending data. The US Federal Reserve pared back its bond purchase programme by another $10 billion a month, and the market now seems quite relaxed about the gradual withdrawal of monetary stimulus.”
The Euro zone also showed further signs of recovery, according to Chant. “Recently we saw Portugal exit its international bailout programme, and that leaves Greece as the lone nation still receiving bailout funds.”