Data Analysis Research Report Essay Example

be seen in the graph above. However, there has been a gradual improvement in current superannuation fund performance, which has led consumers to regain confidence.

4.0 Current Data (One Variable Analysis)
The economic recovery in Australia has remained consistent over the past year and is evident in the superannuation market. This section examines the superannuation market to determine the current levels of returns attained. Figure 2 - Distribution of One Year Returns displays the distribution of returns achieved over one year. In the previous year, the average return rate was merely 0.37%, and the lowest return achieved was -18.

The graph above exhibits a slightly right-skewed shape, with the most common returns ranging between 0-0.5 per cent. The range of returns observed spanned from 1 per cent to 11.7 per cent, representing the highest yield achieved. Among the possible factors affecting these returns are investment strategy, three-year returns, investment style, or fund segment. Investment strategy pertains to the way Australians allocate their investments, while taking into account their three-year returns can place negative one-year performance in a more favorable context by showing positive progress relative to previous years.

In this section, we will utilize bivariate and trivariate analyses to evaluate the effect of investment strategy and three year returns on one year returns. The analysis will also take into account various factors that might impact the one year return of superannuation funds. The attainable returns are greatly influenced by the investment strategy adopted by a superannuation fund.

The superannuation industry offers two main types of strategic investment: diversified and specialist. These categories provide various risk and return level options, with a general trend towards higher returns for higher

risks. Figure 3 displays the average one year return for each investment strategy. Although each strategy has its distinct style, funds within the same category can still yield different outcomes.

When comparing the average one year return of Australian Equity at -6.76% and Australian Fixed Interest at 6.99%, it becomes clear which funds offer a reliable and steady rate of return. In this case, funds with fixed interest are considered the most reliable, despite being low risk and offering lower returns. These returns remain positive even during times of economic crisis, making them a safer investment option. Superannuation strategies all offered returns between -0% and 7% after one year.

The impact of investment strategy on one year returns is illustrated in Figure 4. Two primary strategies are depicted: those with a 20% return and those with a 0.15% return. Market share is relatively uniform across all investment strategies, except for fixed interest strategies which hold between 5-7%. It should be emphasized that possessing a larger market share does not necessarily equate to higher rates of return for said funds.

According to Figure 5, Australian Fixed Interest has a small market share but is generating high returns. On the other hand, Australian Equity has a large market share but comparatively lower returns. This implies that investment strategy plays a significant role in one-year returns. Furthermore, comparing three-year returns can also provide better insight into one-year returns, as demonstrated by Figure 5 below.

Figure 5 – Impact of Three Year Returns on One Year Returns
For a larger view please refer to appendix 2Figure 5 – Impact of Three Year Returns on One Year Returns
For a larger

view please refer to appendix 2
The graph indicates a moderate/weak negative association between one year returns and three year returns, which contradicts the expectation that three year returns would have a positive relationship with one year returns. This result reflects the unpredictability of the economic climate. Despite avoiding a recession during the GFC, Australia's market still experienced the impact of the sudden downturn. Prior to the GFC, growth was predicted to continue into 2009, but the GFC demonstrated the potential volatility of economic markets.

Despite having favorable three year returns until late 2008, superannuation funds only held a slight advantage due to the potential for a higher fall from grace. This suggests that the impact of three year returns on one year returns is relatively weak. As previously mentioned, investment strategy and three year returns are likely to have a greater influence on one year returns.

The graph below, identified as Figure 6, depicts how two variables can impact one year returns simultaneously. The figure is titled "Impact of Investment Strategy and Three Year Returns on One Year Returns". To view a larger version, please refer to appendix 3. As depicted in Figure 6, different strategies exhibit varying trends when comparing one and three year returns. However, all trend lines, with the exception of property and international equities, exhibit an upward trajectory. This suggests that with regards to individual investment strategies, three year returns exert a positive influence on one year returns and exhibit a stronger correlation within each strategy than within the industry as a whole.

Each investment strategy carries different levels of risk and potential return, resulting in trends unique to each respective fund. While

a negative relationship between one and three year returns in the Australian property market may be expected given recent market performance, a positive relationship in Australian fixed interest funds is logical considering their positive growth in recent years. However, evaluating strategies based on trends across the entire superannuation industry (as depicted in Figure 5) can be misleading and inaccurate for funds that show positive growth. As demonstrated in Figure 6, the consumer's selected investment strategy strongly correlates with the rate of return on both one and three year investments.

In conclusion, navigating the superannuation industry can be challenging, but informed decisions can be made by analyzing data and identifying trends and relationships. Examining past data and trends can offer insight into future outcomes. The current performance of each fund is influenced by various factors such as the fund's investment strategy and three year returns. Investment strategy has a significant impact on one year returns, while examining both the investment strategy and three year returns together also shows a strong influence on one year returns. 7.

0 Appendix| Appendix 1: Z Score Calculation| Z-Score Calculation | Average/Mean| | Standard Deviation | | Z-Score| | Any scores that fall below -3 or above 3 are considered outliers. | | Appendix 2/Figure 5: Impact of Three Year Returns on One Year Returns Appendix 3/Figure 6: Impact of Investment Strategy and Three Year Returns on One Year Returns