September negative for super returns

Mike Taylor

Managing Editor/Publisher, Financial Newswire

17 October 2022

Negative returns were the order of the day for superannuation fund members in September, according to the latest analysis from SuperRatings. 

The specialist superannuation ratings house said median balanced option fell by 3.1% last months amid increasing global volatility, while the median growth option fell by an estimated 3.8% with the median capital stable option delivering a somewhat less concerning decrease of 1.6%. 

It said pension returns were also down last month with the median balanced pension down an estimated 3.5%, while the median growth option was down an estimated an estimated 4.1%. 

Against this backdrop, the ratings house has urged superannuation fund member to adopt a longer-term outlook. 

Commenting on the September performance, SuperRatings executive director, Kirby Rappell reinforced the need for a long-term view. 

“The first quarter of the financial year has seen greater swings in returns, despite the quarterly return only being around -0.4%,” he said. 

Rappell said this belied the main story in circumstances where SuperRatings was expecting a tougher calendar year for super returns, while noting that funds continued to have suffered more modest falls than equity markets, reflecting diversification in funds’ portfolios. 

“Sticking to a long-term view based on your risk tolerance is key. The current market is toughest for those closer to, or early into their retirement. For younger members, market volatility is only having an impact on paper with a short-term divergence from the long-term average super fund returns of 7% per annum since 1992.” 

“Be prepared to see persistent volatility, while remembering that superannuation remains a long-term game,” Rappell said.