Leading superannuation research house SuperRatings estimates that the median balanced option delivered a return of 3.1% in July, with funds posting a strong recovery of earlier losses. Australian and global equity markets drove the recovery, notably the S&P/ASX 300 Information Technology Sector Index posted a return of 15.4% for the month.

The cash rate rose to 1.85% with the Reserve Bank of Australia’s fourth consecutive rate rise in August demonstrating swift tightening action to quell mounting inflation pressures.

The median growth option rose by an estimated 3.5%, while the median capital stable option also delivered a positive result, with an increase of 1.9%.

Accumulation returns to July 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 3.1% -1.6% 4.9% 6.6% 6.2% 8.3%
SR50 Capital Stable (20-40) Index 1.9% -1.2% 2.4% 3.7% 3.7% 4.8%
SR50 Growth (77-90) Index 3.5% -2.1% 5.9% 7.5% 7.1% 9.6%

Source: SuperRatings estimates

Pension returns also increased in July, with the median balanced pension option up an estimated 3.3%. While a rise of 3.9% was estimated for the median growth option and 2.1% for the median capital stable pension option.

Pension returns to July 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% -1.9% 5.2% 7.0% 6.8% 9.2%
SRP50 Capital Stable (20-40) Index 2.1% -1.7% 2.5% 3.9% 3.9% 5.3%
SRP50 Growth (77-90) Index 3.9% -2.8% 6.3% 8.2% 7.8% 10.4%

Source: SuperRatings estimates

Executive Director of SuperRatings, Kirby Rappell commented, “We’ve been emphasising the importance of focusing on the long-term and amid the recent market uncertainty it’s understandable that people have been concerned about the ups and downs in their account balances. This year we have seen the ongoing challenges of COVID-19 coupled with a challenging global economic environment driving the volatility. We continue to highlight the importance of setting your long-term investment strategy and the performance over the last month shows the perils of trying to time the market, with members who may have switched to more conservative investment options missing out on the bounce back.

It is pleasing to see a strong recovery over the month of July demonstrating the resilience of super funds and their ability to navigate the uncertain investment environment. While we are likely to see bumps ahead, the long-term trend for super funds has remained strong and steady.”

Release ends

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Kirby Rappell
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