Funds are estimated to post negative returns for the second month in a row in September, with leading research house SuperRatings estimating the median balanced option will return -1.8% for the month, as investors adjust to the increased likelihood of interest rates remaining higher for longer. Despite these challenges, the median balanced option return for the 3 months to 30 September 2023 is estimated to be a modest -0.4% fall.
“We observed an acceleration of the August performance trend in September as both international and Australian equities weighed on returns, with sticky inflation the key concern for markets” commented Kirby Rappell, Executive Director of SuperRatings.
The median growth option fell by an estimated -2.2%, while lower exposure to shares resulted in the median capital stable option delivering a smaller loss of -1.1% for September.
Accumulation returns to September 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 | -1.8% | 9.0% | 6.6% | 5.3% | 6.3% | 6.9% |
| SR50 Capital Stable (20-40) Index | -1.1% | 5.1% | 2.7% | 2.9% | 3.5% | 4.3% |
| SR50 Growth (77-90) Index | -2.2% | 11.0% | 8.2% | 6.2% | 7.8% | 8.0% |
Source: SuperRatings estimates
Pension returns also fell in September, with the median balanced pension option falling an estimated -1.8%. The median growth option is estimated to decline -2.3% for the month while the more defensive median capital stable pension option is estimated to deliver a -1.2% return.
Pension returns to September 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 | -1.8% | 10.6% | 7.3% | 5.9% | 7.2% | 7.6% |
| SR50 Capital Stable (20-40) Index | -1.2% | 5.6% | 3.0% | 3.2% | 3.9% | 4.6% |
| SR50 Growth (77-90) Index | -2.3% | 12.1% | 8.7% | 6.9% | 8.5% | 8.7% |
Source: SuperRatings estimates
The trajectory for interest rates and geopolitical tensions are likely to remain as the dominant drivers for superannuation returns over the coming months. While returns fell over the month, relative to the broader market, funds continue to outperform equities due to the benefits of diversification.
“Super funds continue to display strong capabilities in navigating uncertain market environments and members have been experiencing increased levels of ups and downs for some time now” commented Mr Rappell. “Our message to members remains one of focusing on the long term and sticking with their long-term investment strategy. The ups and downs are likely to continue, and members who are thinking about changing their strategy are encouraged to contact their fund, or speak with a trusted adviser, before making any changes.”
Release ends
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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
