Australian superannuation funds have ended the year slumping 1.1 per cent. But fund managers are quick to point out this comes after two bumper years.

Mano Mohankumar, research managers with Chant West Investment, believes despite this latest downturn Australians, particularly retirees, should be pleased with the way funds have performed.

“Returns are nowhere near as high as the previous two years, with a 12.8 per cent increase in 2012 and 17.2 per cent in 2013.

“The increase this year is still in line with the typical growth fund objective to beat inflation by about two or three percent; so around six to seven per cent is the typical return.”

Despite the Australian sharemarket dropping by 3.1 per cent fueled by depreciation in the dollar, fund members enjoyed a 0.8 per cent gain in November.

The predicted 6 per cent median growth for funds is set to be the smallest increase since funds returned 4.7 per cent in 2010.

After 16 months of keeping interest rates at historic lows, the Reserve Bank of Australia is tipped to make more cuts early next year. This is hoped to stimulate non-resource sectors of the Australian economy and ease the current national jobless rate.

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