Super Return Drops

Due to poor share performances, analysts are expecting to see a 2 per cent drop in the average Australian super fund, reports Lacy Battersby, a business columnist for The Sydney Morning Herald.

Are you risk adverse?
In 2011 there were less investors in the share market and more investors in low risk assets, which carry lower returns but lower risk.? With risks facing the global market, many investors are finding that the risks in shares outweighs the large return that they bring, according to Paul Saliba, chief investment officer at Lachlan Partners.

The annual negative return on the Australian super causes worry amongst financial analysts as previous year’s annual returns were positive. Returns of 2009 were 15 per cent and returns of 1020 were 4.7 percent. The Australian super did not face a negative return until the financial crisis of 2008, where it dropped a terrifying 21.5 per cent. With negative returns appearing again, economist Chant West fears that this is a sign to the beginning of another crisis.

Predictions
The median growth of super funds lost 2 per cent because growth funds during 2011 were well diversified amongst a number of growth and defensive assets such as bonds (the highest performing asset of the year).

Fortunately outlooks for 2012 in terms of share markets are expected to do better than they have last year, according to investment research manager Salvador Saiz, from Super Ratings.

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