SelectingSuper has just reported that the workplace default option index for the 12 months to end August 2012 skyrocketed in August to 6.8%, the highest it has been in more than a year.
Meantime, one year retail bank term deposits are averaging around 4% after tax for a non-super investor.
Falling interest rates should also boost bond returns especially when combined with Australia’s safe haven status that has seen government bond yields fall to almost 3.2%.
The strong bounce-back in default super fund options was triggered by the 5.0% August monthly return from the ASX and the 4.5% from international share markets.
Rolling 12 month Australian equity returns are now 5% and international equity returns are 12%, representing a meteoric reversal in fortune in just the two performance months since June when super funds were averaging 0.5%.
Three year returns are meanwhile 4.2% pa and 10 year returns are 4.9% pa. Five year returns are still depressed at only -0.6% pa.
Not-for-profit funds achieved median 12 month returns of 6.9% and corporate master trusts 6.4%, resulting in a segment gap that is only 0.5 percentage points, the lowest it has been in two years.
While the market average was 6.8%, leading funds delivered almost twice this at 11.1%.
The top five Workplace Super funds (by default options) over the 12 months were Lutheran Super with 11.1%, QSuper with 11.0%, ESSSuper with 9.9%, and ANZ Staff Super, AE Super and Quadrant all with 9.0%.
The top five Personal super funds (by balanced options) over the 12 months were Host-Plus with 10.0%, Quadrant with 9.0%, OneAnswer with 8.9% and First State Super, State Super (NSW) and Perpetual Wealth Focus all with 8.6%.
By Alex Dunnin