Local inflation fears cancel out int. shares-driven super returns

Despite international shares riding the highs of a US federal rate cut and the ever in-vogue artificial intelligence (AI) thematic, Australian shares are expected to offset this strong performance in super fund investments last month over rising inflation fears.

According to the latest estimated figures from research house, SuperRatings, the median balanced option generated 0.8 per cent in returns for members over the month of September, with expectations reaching 3.6 per cent in returns for the first quarter of the new financial year.

SuperRatings also estimates the median growth option to return 0.9 per cent in September and the median capital stable option to return 0.5 per cent.

The firm’s data on pension returns during the month of September were also in positive territory, with the median balanced pension option estimated to return 0.9 per cent, the median capital stable pension option at 0.6 per cent and the median growth pension option at 1.0 per cent.

“While international markets have performed well this month, Australian shares are expected to have a dampening effect on overall returns as fears that higher than expected levels of inflation will reduce the likelihood of further rate cuts” Kirby Rappell, Director of SuperRatings, said.

“Over recent years we have seen a shift in super fund investments towards a more equal mix of Australian and international shares, compared to the historically higher Australian shares allocation.

“We continue to see the benefits of having a range of asset types, regions and sectors with a long-term focus.

“For most of us, super is a long-term investment, and we encourage members to formulate and stick to a long-term plan that is suitable for them.

“Funds provide a range of education, tools and advice that can help members work out a suitable strategy, or members can seek independent financial advice, just make sure to check on and be comfortable with any cost for advice before going ahead.”