Industry Super Funds Shine While Other Investments Flounder

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Despite a taxing year on international markets that caused funds under management in Australia to drop, the not-for-profit superannuation sector defied the odds and experienced growth.

According to a study by DEXX&R, capital under management in the Australian market dropped significantly to $1.36 trillion during the 12-month timeframe from September 2019 to 2020 – an approximate 9.9% decrease.

The fall was prompted by various causes, from a drop in equity markets to customers removing funds from managed investments outside of superannuation.

Adam Rogers, a DEXX&R analyst, reported that the annual outcomes yielded an impressive reversal from the 19.8% rise in FUM for the year to September 2021.

Although these overall figures encompass superannuation and other managed investments, they do not include bank accounts.

The performance of the funds under management (FUM) across all superannuation sectors was highly diverse.

In a marked increase, not-for-profit funds encompassing the industry and public sector saw an uptick of 0.2%, bringing total assets under management up to $1.41 trillion.

The top 10 industry and public sector funds achieved an impressive 7.9% growth in the past year, primarily attributed to two main contributors: AustralianSuper and Australian Retirement Trust, accumulating FUM by 11.5% and 7.2%, respectively.

Despite the 5.4% median decrease in balanced funds, which is where most members have their money as per Chant West researcher Mano Mohankumar’s research, performance remained vital for September year-end.

“The median balanced option returned 3.2% over the 12 months to 30 September 2020, slightly above its medium-term return of 2.9%, but still well below its 10-year average of 6.5%,” said Mohankumar.

In comparison, the returns of retail funds decreased heavily due to their investments in international markets and listed Australian equities.

These figures demonstrate that the not-for-profit superannuation sector has outperformed its counterparts during tumultuous economic times. This is a testament to why it’s an excellent option for Australians looking to secure retirement. With more extraordinary performance and lower fees, industry and public sector funds are the clear choices for those seeking a brighter future.

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