06 January 2016
by ANR

Australian superfunds set for a half-year loss, report shows

Research prepared by SuperRatings shows that Aussie superannuation funds may experience a loss in the first half of the financial year.

The projected 0.5 per cent loss for the six months to December is fuelled by decreased commodity prices, low interest rates and the slowdown in China. Although the ASX is down almost four per cent for the year [3.92 per cent], some sectors have suffered greatly. Materials are down 19.9 per cent and energy 33.3 per cent –much of the drop has occurred since July, Business Insider reported.

Leading metals and bulk commodities had a tough year with oil down over 30 per cent and iron more than 40 per cent. UBS believes the situation is unlikely to improve next year and is projecting 10 year lows in demand for these commodities.

Kirby Rappell, general manager of research at SuperRatings told the ABC that although “previous months we had a bit of benefit from the Aussie dollar falling,” this wasn’t the case “in the last month or so, which has meant that it hasn’t created that buffer that we’ve experienced previously.”

Chant West, another superannuation research and consultancy firm, also believes superannuation funds will post a loss, down 0.1 per cent in the first half of the 2015-2016 financial year. However, Warrant Chant, the company’s director told the ABC that local superannuation funds had registered healthy returns since the global financial crisis and urged members to be patient.