Superannuation investment returns

porkupine888 on 17/07/2019 - 11:23
Last edited 17/07/2019 - 11:31 by 1 other user

Wondering if Ozbargainer ever realised that superannuation investment reporting is different from actual account balance reflections?

e.g. if a super fund reports in news / broadcast media that they proudly return 12% per annum, and do the 1 yr 3 yr 5 yr return graph, it is DEFINITELY not a reflection one-to-one match to an account primarily because in the accounts, they force positions and force buy and sell mid year or so ? i.e. TECHNICALLY their investment portfolio WOULD have made X amount say 13% but in reality , mid year, my portfolio of $5000 gets SOLD and rebought after 1/7 which might have meant a LOSS on my side if the value of the share/fund/unit was HIGHER on that particular date

wondering why this has never been highlighted or under scrutiny?

and please don't go on about opinions regarding SMSF - this is a query in specific isolation towards why / how large super companies get away with this ?

or am i completely blind sighted by something else as it definitely isn't a paper loss in our accounts until withdrawal

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  fantombloo on 17/07/2019 - 11:42

  +2

  Why does this post feel like it's missing a peppering of line-feeds and a signature by IVI?

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  Seraphin7 on 17/07/2019 - 12:51

  +5

  I'm not really sure what your question is.

  The reported fund performance is (I know this is a shocker) based on the actual fund performance.

  There will be differences between this reported figure and your actual performance based on a range of factors (including choices you have made through the year), but there is not some system going of reporting performance of +10% and delivering performance of -10%.

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    Skramit on 17/07/2019 - 13:14

    +4

    I'm not really sure what your question is.

    I was about to say the same thing. It's a fair old ramble that doesn't quite make a point or ask a question.

    ¯_(ツ)_/¯

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  ozbd on 17/07/2019 - 13:02

  What do you mean by "they force positions and force buy and sell mid year or so"

  • 

    Donaldhump on 17/07/2019 - 19:23

    The mind ponders

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  wannagrababargain on 18/07/2019 - 10:11

  My brain hurts but if I understand correctly you are with one of the "crediting rate" funds that only realise the actual earnings into your account on 30/6. You portfolio is not "rebought" on 1/7, the earnings are calculated and applied (rather than 'estimated' as on every other day of the year). Investment performance varys from day to day. The $500 that got contributed to your account in January might be worth $750 now beacuse Jan, Feb, and Mar were really good months but the $500 from April might be worth $501 now because Apr, May, Jun nothing happened. So to work out if the fund is cheating you, you will have to know the daily crediting rate going back 1Y, 3Y, 5Y and apply it to your monthly contributions since then.
  The fund performance number is the total increase in a rolling 1Y, 3Y, 5Y etc window if you say invested $10000 exactly 1Y/3Y/5Y ago and left it there until today. Yes it's probably an oversimplified number, and 'past performance is not a measure of future gain', but all funds calculate it the same way so it does give you some level of historical comparison between different funds.