Super funds record strong returns for 2016

The median balanced fund option is on track to deliver an estimated 7.2 per cent for the year, the research company said, marking the sector’s fifth consecutive year of positive returns.

While this is marginally below the 7.7 per cent per annum average seen over the last seven years, it remains above the 5.2 per cent per annum average achieved over the last 10 years, SuperRatings said, adding that longer-term returns still sit “well above most funds’ CPI targets”.

SuperRatings chair Jeff Bresnahan described 2016 as “a year of extremes”, noting that funds struggled in the early months of the year, with many posting “significant losses” before recovering as markets stabilised.

“Of course, we then had Brexit and the corresponding rebound, a bearish October ahead of the US election, and then a big lift to end the year, led by equities,” he said.

“While volatility may have induced a few nosebleeds, funds have generally had a strong positive year, ending the calendar year above their long-term objectives.”