A market bounce in March has supported super fund performance, with the global economy maintaining a reasonable degree of momentum. However, inflation concerns continue to mount as consumers face cost pressures.

The Reserve Bank of Australia kept rates on hold at a low of 0.1% citing ongoing inflation challenges and uncertainty due to the war in the Ukraine, although we see expectations of interest rate rises increasing.

Leading superannuation research house SuperRatings estimates that the median balanced option rose by 1.1% in March. Over the financial year to 31 March 2022, we see an estimated return of 2.4% for the median balanced option.

Kirby Rappell, Executive Director of SuperRatings said, “It is pleasing to see performance recover over the month, as we head towards the end of the financial year. It has been a rockier year for super fund members, although funds seem to be navigating the uncertainty reasonably well. While many Australians feel the impact of natural disasters and increasing inflationary pressures, super continues to support improved long-term financial security for many.”

“I’ve said it before and I will say it again, it is important to focus on the long-term when it comes to your superannuation. The rebound in performance over the March period reinforces this, if a member had switched when they saw performance fall in February, they would have locked in the loss instead of benefiting from the recovery we have now seen.”

The median growth option increased by an estimated 1.6%. The capital stable option, which has less exposure to equity markets in favour of bonds and cash, rose by 0.1%.

Accumulation returns to March 2022

  Monthly 1 yr 3 yrs (p.a.) 5 yrs (p.a.) 7 yrs (p.a.) 10 yrs (p.a.)
SR50 Balanced (60-76) Index 1.1% 7.6% 7.5% 7.5% 6.9% 8.4%
SR50 Capital Stable (20-40) Index 0.1% 3.1% 3.7% 4.0% 4.0% 5.1%
SR50 Growth (77-90) Index 1.6% 9.2% 9.0% 8.8% 7.7% 9.5%

Source: SuperRatings estimates

Pension returns have also risen in March, with the median balanced pension option up an estimated 1.2%, compared to an increase of 1.8% for the median growth option, while performance is estimated to be flat at 0.0% for the capital stable option.

Pension returns to March 2022

  Monthly 1 yr 3 yrs (p.a.) 5 yrs (p.a.) 7 yrs (p.a.) 10 yrs (p.a.)
SRP50 Balanced (60-76) Index 1.2% 7.8% 8.3% 8.1% 7.4% 9.4%
SRP50 Capital Stable (20-40) Index 0.0% 3.1% 4.0% 4.5% 4.3% 5.5%
SRP50 Growth (77-90) Index 1.8% 9.6% 9.6% 9.3% 8.5% 10.6%

Source: SuperRatings estimates

We estimate that the return over the financial year to March 2022 is sitting at 2.4% as shown below. Further, since the inception of superannuation, we have only seen 4 negative financial year returns (FY02: -3.1%, FY08: -6.4%, FY09: -12.7%, FY20: -0.8%). The average annual return over this period sits at around 7.2% pa which is ahead of fund objectives which are typically inflation + 3.0% over rolling 10-year periods.

Evidently, while the superannuation road may be bumpy at times, over the longer-term the typical balanced option shows a positive story for Australians.

Kirby Rappell commented, “We are currently on track to end the 2022 financial year in positive territory, depending on how investment markets perform over the June quarter, though performance will be far more muted than that observed in FY2021. While it is pleasing to see performance recover over the month of March, superannuation should be viewed with a long-term lens as there will be ups and downs over shorter term periods.”

Release ends

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For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725


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