CHART: Super fund returns have been hammered by the Greek debt crisis

Australia’s average balanced superannuation funds will probably not make double digit returns for the 2015 financial year.

The Greek debt crisis has dragged the value of global and local equities in the closing days of the year, as this chart shows:

With the estimated 2.5% fall in the last quarter, analysts at SuperRatings say balanced funds will show a return of around 9% for the year.

Funds were hit hard in June with the Australian share market falling 6.2%. A decline in international share markets also saw global indices fall more than 2% in June.

Super funds had been tracking for an 11% or more return before the share market fall of recent weeks.

“Global shares have been extremely volatile recently with the Greek debt problem and the wider implications for the European Commission weighing heavily on investor sentiment around the world,” says SuperRatings chief executive officer Adam Gee.

Warren Chant, of analysts Chant West, says median growth funds will post a return of about 9.5%. These are funds which have 61% to 80% of their investments in growth assets.

Returns will range, depending on the fund, from about 12% to a low of 6.5%.

The stronger performers will be those with a relatively high exposure to foreign currency because of the decline in value of the Australian dollar, Australian listed property and a lower holdings in Australian shares, bonds and cash.

The last negative return for superannuation was in 2008-09.

The six straight years of positive returns have created about 73% growth overall or an average of 9.5% a year.

That’s about 7% a year above the inflation rate.

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