Super funds maintain momentum in July

Oksana Patron

14 August 2023

Despite a bumpy outlook ahead, the median balanced option delivered a return of 1.5% in July, according to superannuation research house SuperRatings.

The superannuation funds have continued to build on the momentum in markets seen over the final quarter of FY23, helped by energy and commodities sectors which performed well over July.

However, the impact of inflation continued to affect markets, causing Australian and global equities delivering modest returns.

“We expect returns will remain bumpy over the short term, despite the Reserve Bank of Australia taking a wait and see approach in both July and August following indications that the tightening cycle is beginning to have a clearer impact on spending and consumption,” the research house said in a note.

At the same time, median growth option was up by an estimated 1.8%, while the median capital stable option delivered a small positive result, with an increase of 0.8%.

According to data from SuperRatings, pension returns also increased in July, with the median balanced pension option up an estimated 1.7%.

“The median growth option is estimated to rise 2.0% for the month while the more defensive median capital stable pension option is estimated to deliver a 0.9% return,” SuperRatings said.

Executive Director of SuperRatings, Kirby Rappell, said that funds had a strong finish to FY23 with the median balanced fund returning 9.1% over the year to June and it was “pleasing to see” funds maintaining that momentum into the first month of FY24.

“With funds in the process of preparing annual statements, it is a great time to think about reviewing your superannuation arrangements. There are some simple rules of thumb to check including the level of fees you are paying, the performance of your investments and how much insurance cover you have,” he added.

“If you are unsure of what settings are suitable for you, reach out to your fund to see what services they might offer to help you make these decisions or talk to a trusted adviser and remember to check if there is any cost associated with accessing these services before you agree to them.”