Lonsec Retirement Perspectives Archives

Media release: Super funds feel modest headwinds during August

After a positive start to the new financial year, super fund returns faced modest headwinds in August with the median balanced option delivering an estimated return of -0.1% according to leading superannuation research house SuperRatings.

The trajectory for inflation remains a key driver for markets with uncertainty around central bank’s rates pathway remaining front of mind. Both Australian and global equities reported small declines over the month with diversification continuing to benefit members in reducing underperformance.

The median growth option fell by an estimated -0.3%, while lower exposure to shares resulted in the median capital stable option delivering a small positive result, with an increase of 0.1% for August.

Accumulation returns to August 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	-0.1%	7.7%	7.1%	5.7%	6.6%	7.2%
SR50 Capital Stable (20-40) Index	0.1%	4.2%	3.0%	3.1%	3.6%	4.5%
SR50 Growth (77-90) Index	-0.3%	9.3%	8.5%	6.6%	8.1%	8.4%

Source: SuperRatings estimates

Pension returns followed a similar trend over the month, with the median balanced pension option falling an estimated -0.1%. The median growth option is estimated to decline -0.2% in August while the more defensive median capital stable pension option is estimated to deliver a 0.1% gain.

Pension returns to August 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	-0.1%	8.7%	7.7%	6.3%	7.5%	7.9%
SR50 Capital Stable (20-40) Index	0.1%	4.7%	3.4%	3.4%	4.1%	4.9%
SR50 Growth (77-90) Index	-0.2%	9.8%	9.1%	7.4%	8.9%	9.2%

Source: SuperRatings estimates

“Market uncertainty persists, and we continue to expect monthly fund returns to bounce around” commented Executive Director of SuperRatings, Kirby Rappell, “However, over the long term, we know funds have a strong record of performing above objectives. The key message for most members is ensuring their settings are right for the long term in order to provide dignity in retirement.”

Monitoring investment performance is a good hygiene factor for members and the results of the latest annual performance test were recently released. The test has had a significant impact on MySuper default products over the past three years with the only MySuper product to fail the test this year already being closed to new members. The test was also expanded to a broader range of products this year and members who are invested in a failing product will soon be receiving a letter from their fund. If you do receive that letter, make sure you review your investment option or speak with a trusted adviser to understand why it failed and if it’s still suitable for you.

“We’ve seen a more subdued return for super funds over August, however the strong returns in July mean performance remains positive overall for the new financial year. We encourage members to focus on the longer term and be prepared to see more ups and downs over the coming months” concluded Mr Rappell.

Release ends

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

September 12, 2023/by Kirby Rappell

Media release: Super funds end out financial year with strong June returns

Equity markets remained strong over June with the superannuation industry closing out the year with returns that more than made up for last year’s losses. Leading superannuation research house SuperRatings estimates that the median balanced option returned 1.2% over the month of June, strengthening an already positive annual return to 8.5% for the year to 30 June 2023. This follows on from the -3.4% return last financial year, demonstrating the industry’s ongoing ability to navigate an uncertain market environment.

Executive Director of SuperRatings, Kirby Rappell said, “While there are significant conversations about interest rate rises, inflation and global uncertainty front and centre within the economy, it is reassuring to see superannuation funds’ ability to deliver a competitive outcome for everyday Australians.”

Mr Rappell continued “While economic pressures are hard to ignore, superannuation continues to perform well on a long-term basis with most funds managing to keep performance in line with the typical CPI+3.0% investment objective over 10 and 30 years. We expect funds may struggle to meet their inflation plus objectives over the short term, particularly as inflation remains elevated; however, super funds have done well to capitalise on the opportunities available to ensure members’ super account balances continue to grow. While the current cost of living is certainly putting pressure on many Australians, superannuation continues to play its part for people’s longer term financial outcomes.”

The median growth option returned an estimated 1.4% over the month, while capital stable options which hold more traditionally defensive assets such as cash and bonds returned 0.3%.

Accumulation returns to June 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	1.2%	8.5%	7.4%	5.7%	6.8%	7.4%
SR50 Capital Stable (20-40) Index	0.3%	4.5%	3.1%	3.1%	3.7%	4.5%
SR50 Growth (77-90) Index	1.4%	11.1%	9.0%	6.8%	8.2%	8.7%

Source: SuperRatings estimates

Pension returns also ended the financial year strongly, with the median balanced pension option up an estimated 1.3% over June. The median growth option rose by 1.6% while the median capital stable option is estimated to deliver a 0.3% return for the month.

Pension returns to June 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	1.3%	9.8%	8.2%	6.4%	7.7%	8.3%
SR50 Capital Stable (20-40) Index	0.3%	5.1%	3.7%	3.5%	4.2%	5.1%
SR50 Growth (77-90) Index	1.6%	12.2%	9.6%	7.5%	9.2%	9.4%

Source: SuperRatings estimates

Super Performance Continues to Exceed Targets

The chart below shows that the average annual return since the inception of the superannuation system is 7.1%, with the typical balanced fund exceeding its long-term return objective of CPI+3.0%.

This year international equities were the standout performers for super funds, with Australian equities and listed property also supporting the strong performance over the year. Unlisted assets, such as unlisted property, have placed a bit of a drag on returns, with a significant number of funds writing down unlisted valuations. These assets have performed well over the long term and provided crucial diversification within portfolios. More defensive options had a tougher year with smaller allocations to equities and a relatively subdued return from fixed interest, however cash options did provide a small silver lining as returns rose off the back of central bank rate rises.

We continue to emphasise the importance of setting a long-term strategy for your superannuation. Despite the strong performance over the past year, we suggest members remain alert, but not alarmed, and review their longer-term settings, such as whether they are in the most appropriate investment option for their situation and check their fees, when they check their annual statements.

Mr Rappell commented, “12 months ago, we did not anticipate an 8% return for this year and so, many people would see this as a positive. Further, long term returns remaining strong. However, we expect the ups and downs observed over the last 12 months to continue and members should be prepared for their balances to fluctuate. If you are not approaching or in retirement, keep in mind that all market movements in the short term are not likely to be what you are thinking about when you retire in 20 or 30 years time.”

Release ends

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

July 6, 2023/by Kirby Rappell

Lonsec Retirement Perspectives, Media releases

Media release: Super fund performance remains strong despite market uncertainty

Stubbornly high inflation and a return to tightening monetary policy by the Reserve Bank of Australia has led to persistent uncertainty in markets over the past year. Superannuation fund returns are expected to be slightly negative over the month, with leading superannuation research house SuperRatings estimating the median balanced option generated a return of -0.2% for May. Despite the uncertain outlook for inflation, we estimate financial year to date returns on a Balanced (60-76) option to be 7.9% as at the end of May. Depending on returns throughout June, super funds are on track to manage a return above inflation for the past 12 months.

The median growth option fell by an estimated -0.3% over May, while the median capital stable option is estimated to decline by -0.2%.

Accumulation returns to May 2023

	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	-0.2%	7.9%	4.0%	7.4%	5.9%	6.6%	7.3%
SR50 Capital Stable (20-40) Index	-0.2%	4.4%	2.6%	3.2%	3.2%	3.7%	4.5%
SR50 Growth (77-90) Index	-0.3%	9.6%	5.0%	9.1%	6.8%	7.7%	8.5%

Source: SuperRatings estimates

Pension returns saw a similar fall over May with the median balanced pension option estimated to decline by -0.3%. The median growth pension option is also estimated to fall by -0.3%, while the median capital stable pension option fell by an estimated ‑0.2% over the month.

Pension returns to May 2023

	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	-0.3%	8.6%	4.7%	8.0%	6.4%	7.5%	8.0%
SR50 Capital Stable (20-40) Index	-0.2%	4.9%	3.2%	3.7%	3.5%	4.1%	4.9%
SR50 Growth (77-90) Index	-0.3%	10.6%	5.5%	9.7%	7.6%	8.6%	9.2%

Source: SuperRatings estimates

Executive Director of SuperRatings Kirby Rappell commented, “While May saw a small fall, funds are currently on track to deliver a return in excess of inflation, so funds have kept the value of members money from diminishing in a high inflation environment, which has been no simple task.”

In dollar terms, members with $100,000 invested in the Balanced option at the start of July last year would have an estimated $107,833 in their account at the end of May, not accounting for administration fees or any insurance premiums they may pay. Members investing in the more defensive Capital Stable option would have an estimated $104,677 with smaller ups and downs throughout the year, while members that limited their investments to Cash would have a lower overall balance of $102,358 while seeing small gains each month. This demonstrates that fund’s investment strategies are behaving as expected by trading off between account growth and a smooth return, even in such uncertain times.

“Inflation, and the central bank response to inflation, have been the most influential factors for superannuation performance this financial year and we expect this to continue into FY24. Super fund returns have had a bumpy year with markets facing several shocks over the last 11 months; however, funds continue to navigate the challenges well with most accounts seeing growth over the course of the full year”, Mr Rappell continued.

Release ends

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

June 9, 2023/by Kirby Rappell

Lonsec Retirement Perspectives, Media releases

Media release: Super performance stays strong in April

Markets continued their upward trajectory in April with leading superannuation research house SuperRatings estimating the median balanced option generated a return of 1.2% for the month, driven by continued momentum in Australian and global equities. However, inflation continues to sit well above central bank targets and the Reserve Bank of Australia defied expectations by increasing rates by another 25 basis points in their May meeting, again highlighting the ongoing challenge posed by inflation.

As we head towards the end of the financial year, funds look to be on track to deliver strong absolute returns with an estimated 8.1% return for a Balanced (60-76) option over the financial year to date.

The median growth option rose by an estimated 1.4% over April, while the median capital stable option rose by an estimated 0.7%.

Accumulation returns to April 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	1.2%	3.2%	8.3%	6.0%	7.0%	7.4%
SR50 Capital Stable (20-40) Index	0.7%	2.2%	3.7%	3.3%	4.0%	4.5%
SR50 Growth (77-90) Index	1.4%	3.6%	9.9%	7.0%	8.1%	8.6%

Source: SuperRatings estimates

Pension returns also improved over April with the median balanced pension option rising an estimated 1.3%. Similarly, the median growth pension option is estimated to rise by 1.6%, while the median capital stable pension option gained an estimated 0.7% over the month.

Pension returns to April 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	1.3%	3.4%	9.1%	6.5%	7.7%	8.0%
SR50 Capital Stable (20-40) Index	0.7%	2.3%	4.2%	3.6%	4.4%	4.9%
SR50 Growth (77-90) Index	1.6%	4.4%	11.0%	7.8%	9.0%	9.3%

Source: SuperRatings estimates

“The strong financial year to date return will be welcome news for members after last year’s losses as well as some bumpy months at the start of this financial year. However, these returns and latest inflation figures demonstrate the challenge facing super funds, the economy and everyday Australians. Inflation for the year to March sat at 7%. Most funds over the longer term are targeting a return of inflation plus 3% per annum for their members invested in the balanced option. Put simply, super funds are on track to return around 8% thus far this financial year, despite this also being behind an objective of inflation plus 3%. What it reinforces is that super remains a long term game and that returns are holding up pretty well, despite the challenges that funds and their members are facing to adapt to a higher inflation environment.”, commented Executive Director of SuperRatings, Kirby Rappell.

“We expect to see continuing volatility in returns, despite the strength with which volatility has been navigated to date. Setting long term strategy remains the best approach to long term success. While fund performance may struggle to significantly outpace inflation in the current environment, over the long term they continue to perform well.”

Release ends

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

May 9, 2023/by Kirby Rappell

Lonsec Retirement Perspectives, Media releases

Media release: Markets close out March quarter on a positive

While inflation indicators continue to be closely watched, markets recorded a positive return March following the slight fall in February, closing the first three months of 2023 on a positive note. Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 0.9% for March and 3.4% for the first three months of the year.

While the Reserve Bank paused their increases to the cash rate in April after 10 consecutive increases, significant uncertainty remains over the direction of the federal funds rate. While markets may anticipate a pause; there has been no pause in volatility as half of the previous 8 months returns were negative, with this remaining the outlook for the remainder of the financial year.

The median growth option also rose by an estimated 0.9% over March, while the median capital stable option rose by an estimated 1.0%.

Accumulation returns to March 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	0.9%	0.6%	8.9%	6.1%	6.9%	7.4%
SR50 Capital Stable (20-40) Index	1.0%	0.9%	3.9%	3.3%	3.9%	4.5%
SR50 Growth (77-90) Index	0.9%	0.6%	10.9%	7.2%	8.0%	8.7%

Source: SuperRatings estimates

Pension returns also rose over January, with the median balanced pension option up an estimated 3.5%. While an increase of 3.9% was estimated for the median growth option and a more modest 2.0% for the median capital stable pension option.

Pension returns to March 2023

	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%	0.4%	9.9%	6.6%	7.7%	8.1%
SR50 Capital Stable (20-40) Index	1.2%	1.0%	4.5%	3.7%	4.4%	4.9%
SR50 Growth (77-90) Index	0.9%	0.2%	11.8%	7.9%	8.9%	9.4%

Source: SuperRatings estimates

“Super funds continue to demonstrate their ability to capture upside benefits for members when they are available in the market while managing for market volatility through diversification. As we edge closer to the end of the financial year the outlook feels slightly more stable, although there is still a chance that annual returns could drop back into negative territory depending on the final quarter of the financial year.”, commented Executive Director of SuperRatings, Kirby Rappell.

“While there has been significant ups and downs over each month in the year so far, superannuation remains a long term investment for most and these shifts have a much smaller impact when considering 10 year performance. Funds are well equipped to navigate changing markets with 10 year performance estimated to be 7.4% and demonstrating resilience to date” Mr Rappell added.

Release ends

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

April 13, 2023/by Joshua Lowen

Lonsec Retirement Perspectives, News & Insights, Video

SuperRatings Quarterly Insights – April 2023

It has been a busy start to 2023 for the industry, with regulatory change ongoing and the need to have the right frameworks to assess member outcomes over time more important than ever.

In this edition, we provide an update on SuperRatings’ annual review and research themes for the industry.

What are the pressures facing funds and who is harnessing their scale?

In meeting with funds across the industry, we saw a number of key themes emanating from our reviews. This video outlines some key findings including:

Despite significant investment, funds are still struggling to define their value proposition.
The correlation between net asset growth and operating expense growth is broken.
Competition is heating up between funds, with a strong focus needed on how well funds are harnessing their scale.

Funds of all shapes and sizes face challenges and opportunities. In the current landscape, tracking and managing them is more crucial than ever.

Kirby Rappell, Executive Director, SuperRatings

April 11, 2023/by Kirby Rappell

Lonsec Retirement Perspectives, Media releases

Media Release: Market rally gives super funds a positive start to 2023

Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 3.0% in January, which will be welcome news for members following a disappointing 2022 calendar year.

The continued upward trajectory in interest rates remains a key challenge for the return outlook, with increasing rates either signalling economic resilience or inflationary threats expanding. The positive return pushed estimated financial year to date returns to 6.0% with five months left in the year, which demonstrates the resilience of super during the market volatility that has been experienced.

The median growth option increased by an estimated 3.4% in January, while the median capital stable option delivered a 1.8% return to members.

Accumulation returns to January 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	3.0%	0.0%	4.3%	5.8%	7.1%	7.6%
SR50 Capital Stable (20-40) Index	1.8%	-0.4%	1.8%	3.2%	4.0%	4.6%
SR50 Growth (77-90) Index	3.4%	0.6%	5.1%	6.7%	8.2%	8.8%

Source: SuperRatings estimates

Pension returns also rose over January, with the median balanced pension option up an estimated 3.5%. While an increase of 3.9% was estimated for the median growth option and a more modest 2.0% for the median capital stable pension option.

Pension returns to January 2023

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	3.5%	0.2%	4.7%	6.3%	7.9%	8.3%
SR50 Capital Stable (20-40) Index	2.0%	-0.4%	2.1%	3.5%	4.4%	4.9%
SR50 Growth (77-90) Index	3.9%	-0.5%	5.5%	7.5%	9.1%	9.6%

Source: SuperRatings estimates

“Funds have had a positive start to 2023 and it again underlines the way in which funds have navigated an uncertain market well overall. However, inflation remains high and the Reserve Bank’s commitment to controlling inflation means member balances are likely to see more ups and downs over the coming months.”, commented Executive Director of SuperRatings, Kirby Rappell.

Release ends

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

February 9, 2023/by Joshua Lowen

Lonsec Retirement Perspectives, Media releases

Media release: Super Funds Continue Year-End Rally

Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 2.6% in November, maintaining the momentum from October.

While inflation remains elevated, some improvement in equity market sentiment helped funds to regain some of the losses from the beginning of the financial year. Uncertainty remains however, as people prepare for the Christmas purchasing season, and members should expect to continue to see their super balances bouncing up and down over the coming months.

The median growth option increased by an estimated 3.2% in November, while the median capital stable option which has less exposure to share markets delivered a smaller positive result, with a rise of 1.6%.

Accumulation returns to November 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	2.6%	-1.3%	4.6%	5.9%	6.7%	8.0%
SR50 Capital Stable (20-40) Index	1.6%	-1.4%	2.1%	3.2%	3.9%	4.7%
SR50 Growth (77-90) Index	3.2%	-1.4%	5.5%	6.8%	7.7%	9.3%

Source: SuperRatings estimates

Pension returns also rose in November, with the median balanced pension option up an estimated 3.0%. While an increase of 3.4% was estimated for the median growth option and 1.8% for the median capital stable pension option.

Pension returns to November 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	3.0%	-1.8%	5.0%	6.5%	7.3%	8.8%
SRP50 Capital Stable (20-40) Index	1.8%	-1.5%	2.3%	3.4%	4.2%	5.1%
SRP50 Growth (77-90) Index	3.4%	-2.1%	5.9%	7.6%	8.5%	10.1%

Source: SuperRatings estimates

“Funds have faced a tough calendar year, though performance has improved over the last couple of months. If we see a small negative return or even a flat return for the typical balanced option for 2022, depending on how December plays out, this would be a better outcome than anticipated a couple of months ago”, commented Executive Director of SuperRatings, Kirby Rappell.

Despite the difficult calendar year to date, superannuation remains a well performing investment over the long term, with an average 6.2% p.a. return since 2000. Mr Rappell commented, “While we expect to see continued ups and downs over the coming year, the recent recovery is good news for members who focused on the long term and stuck to their investment strategy. As the end of the year approaches, we encourage members to review their superannuation with a focus on their long-term risk tolerance to ensure their super is set up for the year ahead. There are a variety of tools to help determine the level of ups and downs you’re comfortable with, as well as the ability to call your fund or adviser for support. Hopefully, this will allow people to better cope with the bumps along the way, as we see super providing improved outcomes for people in retirement over time.”

Release ends

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

December 9, 2022/by Kirby Rappell

Lonsec Retirement Perspectives, Media releases

Media release: Super Funds bounce back in October

Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 3.0% in October, providing a boost to members’ balances.

In November, we again saw a 25-basis point rise in Australia’s cash rate, with markets focused on whether this is a signal that future rate rises are moderating, or the Reserve Bank of Australia is simply waiting for the lagged impact of previous hikes to take greater effect before reassessing the size of future increases. Similar sentiment in the US supported a rally in equity returns over the month, with most markets globally posting positive results, despite inflation remaining elevated. It is pleasing to see some positive news for members this month; however, it reflects the volatile environment, with the bumpy ride expected to continue.

The median growth option increased by an estimated 3.7% in October, while the median capital stable option which has less exposure to share markets delivered a smaller positive result, with a rise of 1.3%.

Accumulation returns to October 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	3.0%	-3.4%	4.5%	5.6%	6.3%	7.8%
SR50 Capital Stable (20-40) Index	1.3%	-2.5%	1.8%	3.0%	3.6%	4.6%
SR50 Growth (77-90) Index	3.7%	-4.5%	5.3%	6.5%	7.2%	9.0%

Source: SuperRatings estimates

Pension returns also rose in October, with the median balanced pension option up an estimated 3.3%. While an increase of 4.1% was estimated for the median growth option and 1.5% for the median capital stable pension option.

Pension returns to October 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	3.3%	-4.2%	4.6%	6.1%	6.8%	8.5%
SRP50 Capital Stable (20-40) Index	1.5%	-3.0%	1.9%	3.3%	3.8%	4.9%
SRP50 Growth (77-90) Index	4.1%	-5.1%	5.7%	7.2%	8.0%	9.8%

Source: SuperRatings estimates

Executive Director of SuperRatings, Kirby Rappell commented, “It is pleasing to see a 3.0% return for members over the month of October; however, it really reinforces the importance of setting, and sticking to, a long-term strategy as members who may have panicked and switched when returns were down last month may have missed out on this recovery. It is going to continue to be a bumpy road and focusing on these short-term indicators isn’t telling you the whole story, so it’s best to consider your long-term objectives and the level of volatility you’re able to tolerate. This will best support setting a long-term strategy that can cope with the noise we are seeing in markets. As we approach the end of the calendar year, it is the perfect time to review your superannuation, talk to your fund or an adviser you trust and run a health check on your current settings to ensure your super is fit for the new year.”

Release ends

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

November 9, 2022/by Kirby Rappell

Lonsec Retirement Perspectives, News & Insights

Your Future, Your Super Review

SuperRatings supports benchmarking of the industry, although understanding its nuances remains a significant exercise. We believe there are key areas of the Your Future, Your Super legislation which could be improved and are supportive of Treasury’s review and have made a submission reflecting this.

The performance test is increasing the awareness of tracking error relative to the test’s benchmark indices, and the need to track and minimise this. There is a reduction in the willingness and ability to engage in Tactical Asset Allocation and Dynamic Asset Allocation. Furthermore, the current set of indices has the potential to distort investment decisions as well as reduce choice for members. We have seen a material slimming of funds’ investment menus to date.

While the test could be expanded to a broader range of Trustee Directed Products (TDPs), we believe that there is not a clear and consistent definition of a TDP that is understood by, and applied across, the industry. If a common understanding doesn’t exist within the industry, it has the potential to amplify confusion amongst members.

October 18, 2022/by Kirby Rappell