Strong returns in FY2019
Aussie stocks are expected to open flat today, but may be eyeing off record highs over the coming weeks.
Last calendar year Australian stocks lost more than 11 per cent between September and December, but have since recovered those losses and then some.
The ASX 200 is up nearly 23 per cent since December 20.
My 15-year chart below doesn't include returns from dividends and shows some of the ups and down along the way.
The rebound will cap a third successive strong year for most superannuation fund balances.
Australian superannuation saw a record inflow of funds across the 2019 financial year as the labour force continues to expand.
But looking forward investors would be wise to expect lower returns on average than they've been getting used to since FY2016.
Australia's massive aggregate of superannuation balances might well swell to beyond $3 trillion over the forthcoming financial year as inflows continue.
Jessica Irvine really wrote this excellent piece for the Sydney Morning Herald highlighting superannuation returns over the 13 years to 2017 averaging a bit above 6 per cent, but in aggregate excessive fees dragging on returns.
Total superannuation fees charged exceed $30 billion, while some retail funds picked dud investments yet still charged excessive fees for the privilege.
Average fees of about 1 per cent per annum might not sound like a lot, but if average expected returns are only CPI plus a few per cent then 1 per cent represents a crippling drag on performance.
