Australian super funds dive 2.5% in 2016 already.
1 February 2016: The global markets have scrubbed 2.5% off the average Australian’s superannuation balance over the first trading week of 2016. Market commentators warn the decline could be the beginning of another Global Financial Crisis-like situation.
Research from Chant west suggests the 2.5% loss involves "balanced growth" funds. These funds mostly invest in growth assets. The average working-age Australian has their super in the "balanced growth" option.
The typical worker has likely lost around $2,500 because of the market drop.
Members in the “high growth” option are down on average 3%. These members have more than 81% of money put towards shares and other growth assets.
The “conservative” option was less harsh with a 1% drop. Members in this option have between 21% to 40% of their money in growth assets.
The sharemarket was at its worst, down 7% for 2016, as China pushed to sell in terms of global markets. Global markets have fallen over concerns about a slowdown in China.
Despite the poor start to the year for super funds, Chant West urge people to approach super with a long term view. Super is a long term investment and should be viewed in that way.
Balanced funds had a return of 4.5% on average in 2015. A balanced option with a good performing super fund could’ve returned 7.5%.
Since 2011, there have been four straight years of positive returns on super. Market fluctuations will always affect the short term investment performance. What really matters is the long term performance for an investment such as superannuation.