Super funds once again delivered a boost to members in March with another month of investment gains. Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 1.9% for March. This takes the estimated return for the first 9 months of the financial year to 8.8%, making a double digit return a possibility depending on outcomes for the final quarter.
Super returns have proven resilient over the year so far with consistent positive performance driven by strong share markets both in Australia and internationally. “We have continued to see fund balances grow, despite ongoing uncertainty over the inflation outlook both here and abroad” commented Kirby Rappell, Executive Director of SuperRatings.
The median growth option gained an estimated 2.3% for the month, while the median capital stable option also rose by an estimated 1.1%.
Accumulation returns to 31 March 2024
| Monthly | FYTD | 1 yr | 3 yrs (p.a.) |
5 yrs (p.a.) |
7 yrs (p.a.) |
10 yrs (p.a.) |
|
| SR50 Balanced (60-76) Index | 1.9% | 8.8% | 11.2% | 6.5% | 6.9% | 7.1% | 7.3% |
| SR50 Capital Stable (20-40) Index | 1.1% | 5.4% | 6.3% | 3.3% | 3.7% | 4.0% | 4.6% |
| SR50 Growth (77-90) Index | 2.3% | 10.5% | 13.40% | 7.7% | 8.4% | 8.4% | 8.5% |
Source: SuperRatings estimates
Pension returns also grew over March, with the median balanced pension option increasing by an estimated 2.2%. The median capital stable pension option is estimated to have grown by 1.2% over the month while the median growth pension option is estimated to increase by a 2.6% for the same period.
Pension returns to 31 March 2024
| Monthly | FYTD | 1 yr | 3 yrs (p.a.) |
5 yrs (p.a.) |
7 yrs (p.a.) |
10 yrs (p.a.) |
|
| SR50 Balanced (60-76) Index | 2.2% | 9.9% | 12.5% | 7.0% | 7.7% | 7.8% | 8.1% |
| SR50 Capital Stable (20-40) Index | 1.2% | 6.0% | 7.1% | 3.5% | 4.0% | 4.4% | 5.1% |
| SR50 Growth (77-90) Index | 2.6% | 11.6% | 15.0% | 8.3% | 9.2% | 9.2% | 9.4% |
Source: SuperRatings estimates
Reflecting on Superannuation balances rebound since COVID
The following chart displays the change in the superannuation balance of a member who had $50,000 in their super account at the beginning of January 2020, before the COVID pandemic began to influence markets.
Assuming no additional contributions or deductions other than investment fees and taxes, a member who had $50,000 invested in the median balanced option at the beginning of 2020 would now have $64,406, while a member investing solely in an International Shares option would have $74,888 and a member who invested in cash would have a balance of $53,244. When measured from the depths of the COVID pandemic, the median international shares option within a super fund has returned 69% or 17% per annum since the lowest point of the pandemic, further highlighting the need for a long-term view on super.
While investing in international shares has provided the highest growth, what can also be seen is the additional uncertainty in account balance each month with the international share index displaying the largest ups and downs over the period.
“The COVID pandemic was a major event for financial markets around the world and while balances have recovered, we continue to see greater ups and downs in returns than prior to the pandemic” commented Mr Rappell. “With the benefit of hindsight, it is fair to say that we didn’t expect the strength of the returns experienced since the depths of the pandemic. With a decent chance of strong returns for financial year 2024, most members will be pleased to see their retirement savings growing, however the ups and downs are expected to remain, and we encourage members to focus on long term outcomes when reviewing their retirement settings”.
Release ends
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For more information contact:
Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au
