Leading superannuation research house SuperRatings estimates that the median balanced option fell by -3.1% in September, as concerns around global volatility increased.
While a smaller 25-basis point rise in the Reserve Bank of Australia’s cash rate in October was a welcome moderation in the pace of increases, upcoming economic data will be closely watched to see the impact of rate rises on global conditions. The main expectation for coming months is more ups and downs, which reinforces the need for a longer-term outlook for super, especially for younger members.
The median growth option fell by an estimated -3.8% in September, while the median capital stable option delivered a smaller negative result, with a decrease of -1.6%.
Accumulation returns to September 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% | -5.7% | 3.5% | 5.6% | 6.3% | 7.6% |
| SR50 Capital Stable (20-40) Index | -1.6% | -3.7% | 1.5% | 3.1% | 3.7% | 4.5% |
| SR50 Growth (77-90) Index | -3.8% | -7.0% | 4.2% | 6.4% | 7.2% | 8.8% |
Source: SuperRatings estimates
Pension returns also decreased in September, with the median balanced pension option down an estimated -3.5%. While a fall of -4.1% was estimated for the median growth option and -1.8% for the median capital stable pension option.
Pension returns to September 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 | -3.5% | -6.5% | 3.7% | 5.9% | 6.8% | 8.4% |
| SRP50 Capital Stable (20-40) Index | -1.8% | -4.0% | 1.4% | 3.2% | 3.8% | 4.8% |
| SRP50 Growth (77-90) Index | -4.1% | -7.9% | 4.5% | 7.0% | 8.0% | 9.5% |
Source: SuperRatings estimates
Executive Director of SuperRatings, Kirby Rappell commented, “The first quarter of the financial year has seen greater swings in returns, despite the quarterly return only being around -0.4%. This belies the main story, we are expecting a tougher calendar year for super returns, although funds continue to have suffered more modest falls than equity markets, reflecting diversification in funds’ portfolios. Sticking to a long-term view based on your risk tolerance is key. The current market is toughest for those closer to, or early into their retirement. For younger members, market volatility is only having an impact on paper with a short-term divergence from the long-term average super fund returns of 7% per annum since 1992. Be prepared to see persistent volatility, while remembering that superannuation remains a long-term game.”
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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
