Leading research house SuperRatings estimates October will see super funds post negative investment performance for the third consecutive month, with the median balanced option expected to post a return of -1.6% for the month of October.
“We have observed continued uncertainty around global markets and inflation, which has weighed on returns from shares,” commented Kirby Rappell, Executive Director of SuperRatings.
The median growth option similarly experienced a negative return of an estimated -1.9%, while the median capital stable option experienced a more modest decline of -0.8% owing to a lower exposure to shares.
Accumulation returns to October 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 | -1.6% | 4.2% | 5.9% | 5.7% | 6.3% | 6.5% |
| SR50 Capital Stable (20-40) Index | -0.8% | 2.9% | 2.2% | 3.0% | 3.5% | 4.1% |
| SR50 Growth (77-90) Index | -1.9% | 4.9% | 7.2% | 6.7% | 7.6% | 7.5% |
Source: SuperRatings estimates
October also saw pension returns fall, with the median balanced pension option returning an estimated -1.8%. The median growth option is also estimated to see a decline -2.2% for the month, while the median capital stable pension option is estimated to deliver a -0.9% return.
Pension returns to October 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% | 4.8% | 6.4% | 6.3% | 7.1% | 7.2% |
| SR50 Capital Stable (20-40) Index | -0.9% | 3.3% | 2.6% | 3.3% | 3.9% | 4.4% |
| SR50 Growth (77-90) Index | -2.2% | 5.3% | 7.9% | 7.5% | 8.4% | 8.3% |
Source: SuperRatings estimates
While data suggests a inflation is moderating, it remains persistently above target and we saw the RBA provide a Melbourne Cup rate rise accordingly. Along with the US Federal Reserve leaving open the possibility of further rate rises to quell their own inflation, the share market rally we have witnessed in November so far may be not be sustainable.
“Despite the uncertain environment of the past quarter, returns remain positive over 1 through to 20 years. Superfunds 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
