Market/Finance News Blog: Super performance in 2014

By the resi financial blog team, 06 January 2015

Market/Finance News Blog: Super performance in 2014

How did your superannuation perform over 2014? If it did as well as the average 'balanced' fund, you'll be pleased with the results. Research by SuperRatings reveals a 7.5 per cent gain for super funds in 2014 - not as good as 2013, but certainly above expectations.

According to the superannuation research company 2013 returned a huge 16.3 per cent on average to investors - a staggering amount. While 2014's gain is not nearly as impressive, it exceeds the goal of a balanced fund of at least 3.5 per cent over the CPI per annum. This is the third consecutive positive result for super funds and the eighth in the last 10 years. Super fund holders who have held their savings for at least 10 years up to December 28 should have experienced an appreciation of their fund by around 6.3 per cent per annum over that time, according to SuperRatings.

The Australian dollar's impact on super funds

Super funds with international stocks have greatly benefited not only from gains in International Shares, according to SuperRatings, but the falling Australian dollar has also amplified these gains to a significant level.

With the Aussie dollar sitting at its lowest level against the United States dollar in five years, it can be expected that super funds with an allocation of international investments will continue to benefit. Late last year the Governor of the Reserve Bank of Australia, Glenn Stevens, noted that the currency was overvalued against the USD and that further drops in value could be expected - and should be welcomed.

In a speech to the Committee for Economic Development of Australia on November 18 last year, Mr Stevens noted that the lowering of the value of the Australian dollar would have a beneficial effect on the economy as whole, especially as the resource sector continues its slow decline.

"The decline in the exchange rate will be of some help here, but the currency remains above most estimates of its fundamental value, particularly given the further declines in key commodity prices in recent months. An exchange rate more in line with fundamentals would be a helpful contributor to a balanced growth outcome," said Mr Stevens.

Just starting in super?

Those that have recently started in super have experienced a huge amount of growth due to recent bumper years, showing that it's never too late to start investing in your future. Super investment funds started five years ago have achieved a median gain of 8 per cent per annum according to SuperRatings. Three-year investments have achieved a massive 12 per cent per annum median gain.

If you've recently joined super, or decided to switch or even look at self managed super funds, make sure you speak to a resi loan specialist to find out how to maximise your superannuation investment options.

Categories: Property Investment