Leading superannuation research house SuperRatings estimates that the median balanced option delivered a return of -0.5% in August, driven by losses across developed markets following an accelerated interest rate response to inflationary pressures.
Another 50-basis point increase in the Reserve Bank of Australia’s cash rate saw it reach 2.35% in August, the fifth consecutive rise reinforcing the bank’s strong commitment to trying to slow runaway inflation.
The median growth option fell by an estimated -0.4%, while the median capital stable option delivered a similar negative result, with a decrease of -0.5%.
Accumulation returns to August 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 | -0.5% | -3.8% | 5.0% | 6.3% | 6.7% | 8.0% |
| SR50 Capital Stable (20-40) Index | -0.5% | -2.5% | 2.1% | 3.4% | 3.9% | 4.8% |
| SR50 Growth (77-90) Index | -0.4% | -4.8% | 6.0% | 7.3% | 7.7% | 9.4% |
Source: SuperRatings estimates
Pension returns also decreased in August, with the median balanced pension option down an estimated -0.6%. While a fall of -0.5% was estimated for the median growth option and -0.6% for the median capital stable pension option.
Pension returns to August 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 | -0.6% | -4.1% | 5.4% | 6.8% | 7.2% | 8.9% |
| SRP50 Capital Stable (20-40) Index | -0.6% | -2.9% | 2.1% | 3.6% | 4.0% | 5.2% |
| SRP50 Growth (77-90) Index | -0.5% | -5.2% | 6.5% | 8.1% | 8.4% | 10.1% |
Source: SuperRatings estimates
Executive Director of SuperRatings, Kirby Rappell commented, “Over the month of August we have seen a slight pullback in the strong recovery in returns we saw in July. While it is a small negative result this month, this reflects the volatility across investment markets, with elevated inflation levels continuing to pose challenges across markets. Another interest rate rise impacted investment returns, though the silver lining here is that this may benefit retirees who are deriving an income from their pension accounts through exposure to cash.”
Setting a long-term strategy remains crucial, with this month’s result showing that we are see-sawing between positive and negative returns over the short term, with multiple factors impacting the global economy and investment markets. Super funds typically have processes in place to navigate these uncertain times, so setting a strategy which meets your needs and then remaining focused on the long term remains our key message.
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We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.
For more information contact:
Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au
