Even the best performing funds of 2007/08, such as the LPT-avoiding Auscoal, delivered negative returns in the worst year yet for modern superannuation.

Any hopes for funds finishing the year in positive territory evaporated in June, with the median fund losing 3.9 per cent – the worst possible finish to an already poor year, said research house SuperRatings. The median balanced investment option has returned -6.39 per cent in the past financial year. SuperRatings said in a release that a common theme among the poorer performing funds was an overweight position in listed property trusts and having a below average allocation to alternative assets. The range of returns for balanced options was also one of the largest ever seen, with Vision Super’s Balanced Growth Fund, the best performing fund, delivering -1.7 per cent, compared with the Legg Mason Corporate Master Trust, the sale value of which will not be helped by a balanced option which returned -15.87 per cent. Auscoal Super, the industry fund for coal mining, ranked fourth in the SuperRatings survey, with a return of -2.37 per cent. Chief executive Bruce Watson said the fund had tilted towards defensive assets in 2005 to minimise downside risk. “Sometimes we have underperformed, but our goal is to deliver consistent, good returns – not be number one,” he said. Watson said part of the result could be attributed to the fund’s decision to diversify away from listed property to more opportunistic direct property investments. According to SuperRatings, over the past year listed property trusts brought losses of around 30 per cent, while direct property assets appreciated by 8 per cent. “It’s not hard to see why some funds fared better than others,” the release said.

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