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
