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Retirement savings have gone backwards for a fifth month

Coogee Beach. Zak Kaczmarek/Getty Images

The value of superannuation funds are being shrunk by a volatile Australian share market.

The median balanced option, held my most Australians, was down 0.5% in February, the fifth negative month of the financial year, according to analysts SuperRatings.

So far this year, funds are down 1.6% and SuperRatings says it has becoming clearer that the past three years of double digit returns won’t be repeated.

The key question is whether there will be a positive median return by the end of the financial year. The case for a positive return is being helped by a rally in March with the ASX 200 index up 6.2%.

“A key challenge for members remains growing their balances to meet their retirement needs,” says SuperRatings founder Jeff Bresnahan.

“This involves working to maintain exposure to growth assets that have performed well over the long term, while ensuring risk is minimised.”

The ASX 200 Accumulation Index was down 1.8% in February. Telecommunications, Technology and Financial stocks performed poorly.

Median superannuation fund balanced option returns at the end of February, according to SuperRatings:

A median balanced option is a fund setting with exposure to growth style assets of between 60% and 76%. Between 60% and 70% of Australians are invested in their fund’s default investment option, which in most cases is the balanced investment.

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