Super assets rebound to $3.5 trillion

Australian superannuation assets have resumed their growth trajectory after the disruption generated by the Russian invasion of Ukraine, according to the latest industry overview released by the Australian Prudential Regulation Authority (APRA).

The APRA data covering the March quarter said that total superannuation assets had returned to level last recorded at the end of December 2021 [$3.5 trillion] and had recovered from their decline over the June and September quarters of 2022.

APRA said the growth in superannuation assets in the March quarter was a result of both the ongoing recovery in investment markets and continued strong contribution inflows.

However, the data also pointed to the impact of volatility noting that the rate of return (ROR) for entities with more than six members for the March 2023 quarter was 3.5% and was 0.4% for the four quarters to March 2023.

“Investment markets have been volatile over the four quarters to March 2023 owing to aggressive monetary tightening by central banks globally to curb inflation which slowed economic growth,” the APRA analysis said.

“The five-year average annualised ROR was 5.6%. It was 6.8% in March 2022.”

The analysis also pointed to the continuing equities in superannuation fund allocations but a growing proportion directed towards international equities.

It said that over the March 2023 quarter, total assets for entities with more than six members increased by 4.0% (or $97.2 billion) to $2.5 trillion.

“With $2.3 trillion in investments, 53.9% were investments in equities (22.3% in Australian listed equities; 26.7%in international listed equities; and 4.9% in unlisted equities). Fixed income and cash investments accounted for 19.0% and 9.3% of total investments.

It said property and infrastructure accounted for 15.5% of total investments whilst other assets, including hedge funds and commodities, accounted for 2.2%.