Comparing bank performance to super performance 'unfair': economist

It's difficult to compare the performance of savings accounts in banks to superannuation funds, says Warren McKeown from the Department of Accounting & Business Information Systems.

Responding to news today that banks had outperformed super funds in the past five years, Mr McKeown, a Teaching Fellow in the Faculty of Business and Economics, said that the GFC is still having an impact.

"The point to make is that there was a dramatic downturn in stockmarkets throughout the world in 2007 to 2009, and recovery is still underway. To compare bank deposits over the three years with investments in superannuation misrepresents the time frame for the investments."

"The focus on the short time period of three years reflects the 24 hour news cycle of politics. For superannuation investments we should be focused on the long term averages of the different asset classes to make valid comparisons. What will be written when the market rebounds with returns of 10-12 per cent at some stage in the near future?"

"To go into this question more deeply, are the present news reports saying that fund managers should time the market and place most of the funds under management into cash when the market falls, and then anticipate rather than play catch up when the market does improve?"

"This heading does nothing to educate the majority of superannuation members about long term investing while it focuses on a short term view."

Provided by University of Melbourne