As further evidence that the Australian sharemarket is indeed rallying to a sustained recovery, superannuation funds have risen for the sixth month in a row, offering some much needed relief to pensioners and retirees.

The latest SuperRatings research shows the median balanced superannuation fund rebounded 14.3 percent between March and August this year.

This results in a minus 7.9 percent performance for the year and a positive 5.4 percent return for the five year period.

“These figures indicate that Australian superannuation funds are well positioned to benefit from the recovery,” said Michael Clancy, Executive General Manager, MLC Investment Platforms.

“This has certainly been the case with MLC’s funds where we’ve seen some impressive gains over the last six months in our Horizon series of diversified funds and also in our Australian shares and listed property funds.

“While these improved performance results should give investors a sense of confidence, we need to keep in mind that the superannuation system is in its nature a long-term savings category and investors should view it that way.

“Typically superannuation funds have meaningful investments in the Australian and global sharemarkets, and as a result will go through good periods of performance and bad. However, history teaches us that over time sharemarkets do trend upwards, which translates into performance for our superannuation funds.”

Investor sentiment on the rise

In the last six months, improving returns for superannuation funds has coincided with a rise in positive investor sentiment.

A separate research report produced by the Investment and Financial Services Association (IFSA) and research firm Core Data, confirmed that investor confidence is returning.

With the sharemarket at 11-month highs, a strong Aussie dollar and confidence building in the property sector, wary investors are experiencing their greatest levels of optimism for two years.

“The small but positive move in the right direction demonstrates investors are slowly becoming more confident about both the economic and investment outlook in Australia” IFSA CEO, John Brogden said.

According to the report more than half of investors believe the sharemarket is improving, with a record two-thirds believing it will show positive returns in the next quarter.

IFSA’s report, which asked investors to assess their financial risk appetite, showed investors were most enthusiastic about Australian shares, managed funds and superannuation funds.

And while there’s still a long way to go before market and investor confidence returns to pre-crisis levels, these latest figures should be encouraging for all investors, not just those who have kept their money in superannuation.