The events in Greece over the past few weeks have been building like a pressure cooker for many years now. Greece’s failure to meet the International Monetary Fund repayment of 1.6 Billion Euros last week was expected given the recent discussions in Europe, and the calling by the Greek Prime Minister of a national referendum to decide either “Yes” or “No” to further austerity conditions on further bailout loans to Greece. The subsequent ‘No’ vote has surprised a market that was expecting a narrow vote in favour of the referendum.

Financial markets are driven by investors who dislike uncertainty and the fall in the markets over recent weeks reflects this. It’s unfortunate that this has happened right at 30 June, being the Australian financial year end. Superannuation returns will be 2% to 4% lower than they would have been had the financial year finished a week earlier.

When you receive your superannuation statements, showing your returns for the year to 30 June 2015, they should still show a healthy positive return of between 6% to 12% this year. More importantly, you will see good growth since last year in dollar terms in your superannuation from your employer contributions, salary sacrifice contributions and the positive investment earnings.

The situation in Greece will sort itself out one way or another. An exit by Greece from the European Union is most likely their best hope of economic growth and eventual repayment of the Greek’s large debts. Since the ‘No’ vote it is predicted the probability of a Greek exit now stands at around 65 per cent.

Superannuation funds in Australia don’t typically have investments in Greek companies or Greek Government loans (bonds). The fall in the Greek stock market only impacts Australian superannuation via the uncertainty it gives international investors.

What does this mean for your superannuation?

Financial markets will regain the amount lost in this past week. This means it is not necessary to alter your investment strategy or the fund selection that your superannuation account is invested in.

Harvest wish you a Happy New Financial Year! Please do not hesitate to contact us should you have any questions about your superannuation.