|
|||||||||||||||||||||||||||
|
Article Date: January 21, 2008 The Australian Stock market has enjoyed fantastic returns over the past three years and Prime Super’s investment team have ensured that our members have shared in this growth. As at 30 June 2007 the return on the average Balanced Option was 14.92% over one year and 14.15% over three years. The average Australian Equities Option was 26.3% over one year and 24.17% over three years. * Since 30 June 2007, however, there have been significant fluctuations in the Australian Stock Market due, mainly, to the “Sub-Prime” crisis, causing market uncertainties in the U.S. In light of this issue the benchmark ASX200 Index for the Australian market has moved as follows:
International shares are also suffering as a result of the U.S. situation, delivering a negative return year to date. Recognising that Australian Equities make up between 25% and 40% of a Balanced Portfolio, with a further 15% to 35% being invested in International Equities, it is clear that performance returns within a Balanced Option are going to be effected. The Balanced Option is specifically referred to here since it is the most common choice for Prime Super Fund members, but it must be remembered that all funds participating in Australian or International Equities will be affected to some degree. The less conservative the investment fund, the larger the effect will be. Listed below is the current asset allocation in Equities of Prime Funds.
The heady days of the past three years appear to have come to an end and expectations for the current year see the return for a Balanced Option being much lower than they have been in the past. This will be the case across the board for all superannuation offerings. Although much can change between now and the end of the year, realistically, members should not expect a high return. It is also very important that you do not forget that superannuation is a long term investment. Over the short term markets can swing significantly up and down, but the long term return is what is important, decisions on your long term investment strategy should not be based solely on short term fluctuations. If you are concerned about the impact of these recent fluctuations on your superannuation account balance you should get your own independent financial advice, or call our financial planning service on 1800 022 365. Disclaimer This article provides general information only and may not be relied on as legal or financial advice. * SuperRatings Fund Crediting Survey |
