| Rebecca RoyN8586799Tutor: Jenny Houtsma
[BSB123 - Data analysis research report]
Analyzing the relationships between different variables in relation to one year returns within the superannuation industry.
Current Data (One Variable Analysis
5.0 Bivariate and Trivariate Analysis
5.1 Impact of Investment Strategy on One Year Returns
5.2 Impact of Three Year Returns on One Year Returns
5.3 Impact of Investment Strategy and Three Year Returns on One Year Returns
Superannuation is something that is relevant to all working Australians and making the correct decisions can have enormous effects on the future. From the age of eighteen, each working Australian’s employer begins to make employer contributions to their superannuation fund. Once the employer begins to make contributions, the employee must start making decisions regarding the investment strategy, segment and specific fund that these contributions are being invested into. By analysing data from historical and present standpoints, it will become evident which superannuation funds have the ability to prosper in the future, while other funds may plummet, essentially reviewing the entire Australian superannuation industry.
In every set of data, whether it be from a population or sample, there is the possibility of outliers. These outliers have the ability to distort or misrepresent the data and can have harmful effects through the analysing process, and can often taint the results. To find the outliers in a set of data, the z-scores of each figure must be found (see Appendix 1). If the z-score calculated is below negative three or above positive three, it is considered on outlier. For this set of superannuation data two of the z-scores fell just below negative three, making them outliers. A decision has been made however, to leave them in as they are just on the outskirts of the data and are not likely to taint or distort the data. This also means that the data being analysed gives a review of the entire superannuation industry.
3.0 Historical Analysis
Analysing past data can give some direction as to where a particular industry is headed in the future. In the case of the superannuation industry, a consistent history gives the consumer confidence in the company they are investing with, whereas an inconsistent history will not promote consumer confidence. The graph below (Figure 1) shows the annual rate of return on superannuation in Australia over the past fifteen years.
Figure 1 – Annual Rate of Return
Figure 1 – Annual Rate of Return
During the past fifteen years, the average yearly return has varied considerably, in 2007 the average rate of return was at its highest at 14.5 per cent, whereas in 2009 it reached its lowest of the period at -11.5 per cent. The major fluctuations in the annual rate of return can be accredited to real life events, the first of which, occurring in 2000. This could be a result of the introduction of Goods and Services Tax (GST), this occurrence was a ‘one-off’and that economically, Australia recovered quite quickly, as GST swiftly regulated itself into the economy. The second major slump in the annual rate of return; occurring in 2008 could be a result of the Global Financial Crisis (GFC), similar occurrences was seen all around the world, and compared to other major nations of the world, Australia performed strongly under the pressure. This fast recovery through 2009, 2010 and 2011 was due to Australia’s mining boom and close trade relationship with China, and other Asian nations. Both of these events had diverse effects on the Australian economy, and as can be seen on the above graph, the Australian superannuation industry. Even with these slumps however, the current performance of superannuation funds is on the last...
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