.... the growing importance of superannuation as a means to fully or partly finance retirement.

This is not surprising given that the superannuation guarantee system has been in operation for 21 years and, as APRA statistics show, the total assets in super now exceed $1.51 trillion as at December 2012.

Without doubt, the confidence of investors in general - including super fund members - can be highly sensitive to not only changes in investment conditions but also to debate about possible legislative changes that may affect their portfolios.

The March 2013 Investor Intentions Index, published by specialist researcher Investment Trends, found that the levels of investor concern rose in March from a 41-month low in February.

It should be emphasised that the report for March did not cover investor reaction to the pre-budget speculation regarding the taxation of super.

From its research, Investment Trends prepares an index of investor concern. The monthly report is based on responses by more than 800 investors who include SMSF members and members of large super funds.

The level of investor concern for March was 6.3 from a possible 10. The higher, the score, the higher the level of investor concern.

Until March, the level of investor concern had been gradually falling, after reaching 7.4 in October 2008, the depth of the GFC. (The average for the past 12 months was 6.5.)

"Investors expressed increased concern over last month's [February's] volatility, Cyprus/Europe contagion and safety of their superannuation," says Investment Trends analyst Kristin Bjerregaard.
Despite the increased level of concern among investors, Bjerregaard adds that their views on the Australian economy are quite positive. "Sixty one per cent think the Australian economy will show healthy growth over the next 12 months..."

On March 28, Smart Investing discussed a paper by Rice Warner Actuaries on the then speculation about budget changes to the taxation of super. (The joint press release from the Treasurer and the Minister for financial services and superannuation, issued on April 5, aimed to clarify the position.) 

By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
9th  April 2013