Over the March 2012 quarter Australian Super funds have posted their strongest three monthly returns in more than two years, on the back of share market gains in Australia and overseas.
The median ‘balanced’ fund offered in the market by superannuation providers returned approximately 4.60% for the quarter.
While this is a great quarterly return, this was achieved with an average of approximately 70-90% invested in growth assets (varies depending on fund) with only 10-30% allocated to defensive investments. Looking over a longer term, in order to express the importance of an allocation toward defensive assets, the Australian share market has returned -6.20% (All Ordinaries Accumulation Index) in the 12 months to the end of March 2012.
The return figures for our model portfolios are listed below. For the balanced fund, in comparison to the above this was achieved with 50% (current allocation) of the total balance allocated to growth assets.
|
|
Jan 12 – Mar 12 (3 Months) |
April 2011-March 2012 (12 months) |
|
Income Portfolio |
4.50% |
2.73% |
|
Balanced Portfolio |
6.04% |
2.69% |
|
Growth Portfolio |
7.19% |
-1.12% |
|
All Ords Accum Index |
9.00% |
-6.20% |
Note: The median ‘balanced’ fund offered in the market by superannuation providers returned approximately 4.60% for the quarter.
From this, we are able to show that our investment approach of maintaining a healthy allocation toward defensive assets throughout the recent turbulence has provided an ongoing income return and protection when markets are weak but still has the potential to capture the growth provided during market upswings. During these times of heightened market volatility and uncertainly, asset allocation plays a major role in the performance of any portfolio.
