Media releases Archives - Page 3 of 7

Media release: Super Funds bounce back in October

Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 3.0% in October, providing a boost to members’ balances.

In November, we again saw a 25-basis point rise in Australia’s cash rate, with markets focused on whether this is a signal that future rate rises are moderating, or the Reserve Bank of Australia is simply waiting for the lagged impact of previous hikes to take greater effect before reassessing the size of future increases. Similar sentiment in the US supported a rally in equity returns over the month, with most markets globally posting positive results, despite inflation remaining elevated. It is pleasing to see some positive news for members this month; however, it reflects the volatile environment, with the bumpy ride expected to continue.

The median growth option increased by an estimated 3.7% in October, while the median capital stable option which has less exposure to share markets delivered a smaller positive result, with a rise of 1.3%.

Accumulation returns to October 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	3.0%	-3.4%	4.5%	5.6%	6.3%	7.8%
SR50 Capital Stable (20-40) Index	1.3%	-2.5%	1.8%	3.0%	3.6%	4.6%
SR50 Growth (77-90) Index	3.7%	-4.5%	5.3%	6.5%	7.2%	9.0%

Source: SuperRatings estimates

Pension returns also rose in October, with the median balanced pension option up an estimated 3.3%. While an increase of 4.1% was estimated for the median growth option and 1.5% for the median capital stable pension option.

Pension returns to October 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%	-4.2%	4.6%	6.1%	6.8%	8.5%
SRP50 Capital Stable (20-40) Index	1.5%	-3.0%	1.9%	3.3%	3.8%	4.9%
SRP50 Growth (77-90) Index	4.1%	-5.1%	5.7%	7.2%	8.0%	9.8%

Source: SuperRatings estimates

Executive Director of SuperRatings, Kirby Rappell commented, “It is pleasing to see a 3.0% return for members over the month of October; however, it really reinforces the importance of setting, and sticking to, a long-term strategy as members who may have panicked and switched when returns were down last month may have missed out on this recovery. It is going to continue to be a bumpy road and focusing on these short-term indicators isn’t telling you the whole story, so it’s best to consider your long-term objectives and the level of volatility you’re able to tolerate. This will best support setting a long-term strategy that can cope with the noise we are seeing in markets. As we approach the end of the calendar year, it is the perfect time to review your superannuation, talk to your fund or an adviser you trust and run a health check on your current settings to ensure your super is fit for the new year.”

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

November 10, 2022/by Kirby Rappell

Media release: Super Funds face challenging market in September

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.”

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

October 13, 2022/by Kirby Rappell

Lonsec Retirement Perspectives, Media releases

Media release: Slight pullback in super funds returns over August

Leading superannuation research house SuperRatings estimates that the median balanced option delivered a return of -0.5% in August, driven by losses across developed markets following an accelerated interest rate response to inflationary pressures.

Another 50-basis point increase in the Reserve Bank of Australia’s cash rate saw it reach 2.35% in August, the fifth consecutive rise reinforcing the bank’s strong commitment to trying to slow runaway inflation.

The median growth option fell by an estimated -0.4%, while the median capital stable option delivered a similar negative result, with a decrease of -0.5%.

Accumulation returns to August 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	-0.5%	-3.8%	5.0%	6.3%	6.7%	8.0%
SR50 Capital Stable (20-40) Index	-0.5%	-2.5%	2.1%	3.4%	3.9%	4.8%
SR50 Growth (77-90) Index	-0.4%	-4.8%	6.0%	7.3%	7.7%	9.4%

Source: SuperRatings estimates

Pension returns also decreased in August, with the median balanced pension option down an estimated -0.6%. While a fall of -0.5% was estimated for the median growth option and -0.6% for the median capital stable pension option.

Pension returns to August 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	-0.6%	-4.1%	5.4%	6.8%	7.2%	8.9%
SRP50 Capital Stable (20-40) Index	-0.6%	-2.9%	2.1%	3.6%	4.0%	5.2%
SRP50 Growth (77-90) Index	-0.5%	-5.2%	6.5%	8.1%	8.4%	10.1%

Source: SuperRatings estimates

Executive Director of SuperRatings, Kirby Rappell commented, “Over the month of August we have seen a slight pullback in the strong recovery in returns we saw in July. While it is a small negative result this month, this reflects the volatility across investment markets, with elevated inflation levels continuing to pose challenges across markets. Another interest rate rise impacted investment returns, though the silver lining here is that this may benefit retirees who are deriving an income from their pension accounts through exposure to cash.”

Setting a long-term strategy remains crucial, with this month’s result showing that we are see-sawing between positive and negative returns over the short term, with multiple factors impacting the global economy and investment markets. Super funds typically have processes in place to navigate these uncertain times, so setting a strategy which meets your needs and then remaining focused on the long term remains our key message.

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

September 19, 2022/by Kirby Rappell

Lonsec Retirement Perspectives, Media releases

Media Release: Super funds post strong recovery in July

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

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

August 12, 2022/by Kirby Rappell

Media releases

Media Release: Lonsec acquires Implemented Portfolios Limited and expands market reach

Lonsec Holdings (Lonsec) is an independent partner to the Wealth Management industry, providing preeminent products and services that are critical to key industry participants to enable them to serve their respective clients efficiently and effectively.

Lonsec’s mission is to “help clients make better investment decisions.” To achieve this, Lonsec continues to lead and evolve with the Wealth Management industry, consistently offering market leading, innovative products and services.

Lonsec is pleased to announce the acquisition of Implemented Portfolios Limited (IPL), a specialist Managed Discretionary Account (MDA) provider to High Net Wealth Individuals and affluent retail clients.

Advisers are increasingly recognising and valuing the substantial time savings and operational risk mitigation benefits of Managed Accounts, with the growing appeal of Managed Accounts predicated on their unique ability to holistically deliver on clients’ investment and service objectives.

Lonsec CEO, Mike Wright, said ‘Lonsec has a deep history and commitment to helping Advisers meet the needs of their clients via our market leading qualitative investment research and Managed Account solutions. I am excited to have IPL joining the Lonsec Group to further enable us to meet the changing needs of Advisers.’

The Australian Managed Account market, currently with Funds Under Management (FUM) of $131.2bn*, is fast growing, with a five year Compounding Annualised Growth Rate (CAGR) of close to 30% pa*. The acquisition of IPL will boost Lonsec’s FUM to over $5bn.

The acquisition of IPL expands our offer with complementary Managed Account solutions now available to Advisers, whether it be Separately Managed Accounts (SMA) or the adoption and deepening of MDA services. From a commercial perspective the acquisition of IPL further diversifies our business and will, positively impact Lonsec’s earnings and margins, before synergies are realised.

Mr Wright said ‘The acquisition will not distract from Lonsec’s core business activity of research and ratings via the key business units of Lonsec Research and SuperRatings. Lonsec is used for research and ratings by hundreds of Fund Managers, Super Funds, and thousands of Advisers every day’. Importantly, to maintain its independence, Lonsec reaffirms its commitment not to issue Retail Managed Funds.

‘Lonsec’s Investment Solutions business harnesses the depth and breadth of Lonsec’s extensive research when constructing portfolios. We look forward to sharing our intellectual capital with the IPL team to potentially leverage when constructing and managing client portfolios.

‘Similarly, we are excited to welcome, and learn from the experienced, professional IPL team, who I know will make a fantastic contribution to our overall business whilst they stay focussed on helping their highly valued IPL clients.’ concluded Mr Wright

Greg Kirk, Executive Chair of IPL, said ‘Since 2010, IPL has been changing the conversation about portfolio construction taking place within advice practices. We only see this expanding as part of the Lonsec Group.’

The businesses will be managed separately for the foreseeable future, with IPL becoming a fully owned subsidiary of Lonsec. To ensure continuity for clients and partners, all of IPL’s staff will remain within the Group. Greg Kirk will remain a Non-Executive Director of IPL, whilst Michael Wright becomes IPL’s new CEO.

*Source: IMAP FUM Census December 2021
+ Source: Investment Trends, January 2022 Managed Account Report

Release ends

For more information, please contact:

Rob Hardy
Rob.Hardy@lonsec.com.au

July 21, 2022/by Rob Hardy

Media releases

Media Release: Best performing balanced super funds for 2022 financial year

Super funds continue to face a challenging economic and investment environment, though we have seen a small recovery so far over the month of July. The median balanced option is estimated to have increased by 0.9% over the first 11 days of July.

Leading research house SuperRatings has released the top performing funds within its SR50 Balanced Index which tracks performance of 50 options with exposure to growth assets of between 60 to 76%. Hostplus – Balanced was the top performing option for the 1-year period ending 30 June 2022, returning 1.6%.

David Elia Chief Executive Officer for Hostplus indicated the fund’s performance was “…a testament to Hostplus’s active investment approach, especially in navigating volatile markets.”

QANTAS Super’s balanced option came in second achieving a return of 0.6%, following its first-place result for the financial year to 30 June 2021.
QANTAS Super’s Chief Investment Officer Andrew Spence commented, “Our focus on diversification, risk management and investment governance help to deliver competitive returns despite the uncertainty in markets, as evidenced by our returns in FY 21/22 and FY 20/21.”

Top 10 balanced options over 12 months

Rank	Option Name	1 Year %	10 Year % pa
1	Hostplus – Balanced	1.6	9.7
2	QANTAS Super Gateway – Growth	0.6	8.1
3	Christian Super – MyEthicalSuper	0.5	7.9
4	legalsuper – MySuper Balanced	-1.0	8.3
5	Australian Retirement Trust – Super Savings – Balanced	-1.0	9.0
6	Energy Super – Balanced	-1.2	8.1
7	Aust Catholic Super & Ret – Balanced	-1.2	7.8
8	CareSuper – Balanced	-1.7	8.7
9	HESTA – Balanced Growth	-1.8	8.5
10	TelstraSuper Corp Plus – Balanced	-1.9	8.5
	SR50 Balanced (60-76) Index	-3.1	8.1

The table above also displays 10-year performance for these funds that have performed the best over the 1-year period, as super is ultimately a long-term investment and while it is interesting to compare performance over shorter-term periods, it is not the full story. This is particularly important to emphasise given the unprecedented levels of volatility we have seen since the beginning of the pandemic.

Hostplus was also the top performer over the long-term, with an average annual return of 9.7% over the last decade. Followed closely by AustralianSuper – Balanced with a return of 9.3% and Australian Retirement Trust – Super Savings with a return of 9.00%. Cbus – Growth (MySuper) delivered a close fourth ranking return of 8.96%.

AustralianSuper Chief Investment Officer Mark Delaney stated, “After more than 10 years of economic growth our outlook suggests a possible shift from economic expansion to slowdown in the coming years. In response, we have started to readjust to a more defensive strategy, as conditions become less supportive of growth asset classes such as shares.”

Top 10 balanced options over 10 years

Rank	Option Name	1 Year %	10 Year % pa
1	Hostplus – Balanced	1.6	9.7
2	AustralianSuper – Balanced	-2.7	9.3
3	Australian Retirement Trust – Super Savings – Balanced	-1.0	9.0
4	Cbus – Growth (MySuper)	-3.8	9.0
5	UniSuper Accum (1) – Balanced	-4.2	8.9
6	CareSuper – Balanced	-1.7	8.7
7	VicSuper FutureSaver – Growth (MySuper) Option	-3.3	8.7
8	HESTA – Balanced Growth	-1.8	8.5
9	Hostplus – Indexed Balanced	-5.7	8.5
10	Aware Super – Growth	-3.7	8.5
	SR50 Balanced (60-76) Index	-3.1	8.1

The Bumpiness Factor

SuperRatings has for many years also looked at how bumpy or consistent a fund’s returns are over time. We have continued to focus on this amid the ongoing ups and downs we are seeing across Australian and global investment markets.

Kirby Rappell Executive Director of SuperRatings commented, “Since the bottom of the GFC we haven’t seen huge amounts of volatility coming through, there have been a few moments, but we have seen extreme levels of volatility since COVID-19 hit and in terms of the menu for the year ahead, we expect to see more volatility.”

The table below shows the top 10 funds ranked according to their volatility-adjusted return, which measures how much members are being rewarded for taking on the ups and downs.

Australian Retirement Trust – QSuper Accum. – Balanced sits at the top of the table below, which shows that the fund achieved a return of 6.1% p.a. over the past seven years. Hostplus – Balanced follows closely in terms of the ranking based on the ability to navigate the ups and downs of the market. While CareSuper – Balanced rounds out the top 3 with a 7-year return of 6.8%.

Australian Retirement Trust’s Chief Investment Officer Ian Patrick commented, “Both Australian Retirement Trust portfolios incorporate dynamic asset allocation processes that see weights increased as expected forward returns increase. While the recent sell off in many markets clearly makes them cheaper, this is tempered by economic views, particularly given the uncertain outlook for inflation.”

Top 10 Funds Based on Risk-Adjusted Performance with 7 Year Return Shown

Rank	Option Name	Rolling 7 Year %
1	Australian Retirement Trust – QSuper Accum. – Balanced	6.1
2	Hostplus – Balanced	8.1
3	CareSuper – Balanced	6.8
4	Cbus – Growth (MySuper)	7.1
5	Mercy Super – MySuper Balanced	6.8
6	BUSSQ Premium Choice – Balanced Growth	6.3
7	Australian Retirement Trust – Super Savings – Balanced	7.3
8	AustralianSuper – Balanced	7.6
9	Prime Super – MySuper	6.3
10	QANTAS Super Gateway – Growth	6.8
	SR50 Balanced (60-76) Index	6.1

Kirby Rappell commented, “While the 2022 financial year has seen super funds record a modest fall, the benefits of diversification have shone through. When we compare returns for equity, bond and listed property markets to balanced style portfolios among super funds, these results should be reassuring to members.”

Mr Rappell continued, “Superannuation is a long-term investment and patience remains key. For those Australians under 50, the recent market volatility is not expected to have any impact on their retirement. This year’s results are just one out of a 30 to 40 year investment for younger Australians.”

This result is more concerning for those nearing or in retirement, however, we often see these members sitting in investment options which are less exposed to these market movements which can lessen the impact. The sobering result for this year is likely to be those members invested in diversified fixed interest, with rising bond yields resulting in capital losses for members in an area often considered defensive.

As 30 June returns are now being finalised, funds will be focused on preparing member statements. Making sure you are putting aside some time to engage with your super statement will be time well spent. Checking the type of investment option you are in, and whether it suits the level of ups and downs you’re comfortable with, is worthwhile, with most funds offering a risk profiling tool on their websites to help members understand their own attitudes to risk. As well as seeing the calculators your fund offers, about 60% of super funds now offer an app, so if you have never checked your super before, now might be the time to get started.

Super has a lot to celebrate over the past 30 years. Since 1992, an estimated 7% per annum return means that $1 invested in 1992 is now estimated to be worth $7.67, depending on fees. While we will see ups and downs over time, super has performed strongly over the long term with 25 positive returns over the past 30 years.

How can you access help?

We rated over 530 superannuation products. Our product ratings are accessible on our website here: https://www.superratings.com.au/products/

You can access advice services on many different types of topics including investments, insurance and retirement, with more detailed advice also available that considers your personal situation – this may be available through your fund directly or by using an adviser that is part of their network.

Contact your fund to see what advice services are available but note there may be a cost for doing so, check how much advice will cost and how you can pay for it before going ahead to ensure it’s right for you.

Alternatively, you may wish to discuss your super with a financial adviser you trust to understand whether your current super settings are appropriate for your personal situation.

The Government provides information on how to select a financial adviser through the MoneySmart website:

https://www.moneysmart.gov.au/investing/financial-advice/choosing-a-financial-adviser

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

Require further information? Simply visit www.superratings.com.au

July 15, 2022/by Kirby Rappell

Media releases

Media Release: $1 of Super invested in 1992 estimated to be worth $7.67 30 years after the Super Guarantee was introduced

The superannuation industry reached a major milestone on the first of July, with the superannuation guarantee system being in place for 30 years. However, it comes at a time of significant market turbulence, with fund performance dipping into the red this financial year. This is off the back of the growing challenges of inflation and interest rate hikes, as well as ongoing global supply chain difficulties due to COVID-19 and the war in Ukraine. Despite the market volatility we have observed over the period, $1 of super invested on 1 July 1992 in the median balanced option, with 60-76% growth assets, is estimated to be worth $7.67 today (depending on fees), underlining the significant benefits super has brought to Australians over the past 30 years.

Leading superannuation research house SuperRatings estimates a return of -3.3% for the median balanced option for the financial year ending June 2022. This is the fifth time financial year returns have been negative since the inception of superannuation in 1992.

Executive Director of SuperRatings, Kirby Rappell said, “Funds have had a challenging second half of the financial year, dragging on a solid first half. This was the 5th negative return for balanced options we have seen since the introduction of super 30 years ago; however, it follows the second highest annual return of 17.8% in 2021. So, when you look at it over the last two years, members’ balances are up.”

Mr Rappell continued “Superannuation is a long-term investment and funds continue to provide strong long-term returns on average and have outperformed the typical CPI+3.0% investment objective. When you consider that share markets are down around 10-12% across Australia and globally, super funds have done well to prevent some of the steep falls that we have seen from being passed through to members’ super account balances.”

The median balanced option declined by an estimated -3.4% over June, while the median growth option reduced by an estimated -4.4%. While capital stable options which hold more traditionally defensive assets such as cash and bonds only fell by an estimated -1.7%.

Accumulation returns to June 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	-3.4%	-3.3%	4.2%	5.6%	6.0%	7.9%
SR50 Capital Stable (20-40) Index	-1.7%	-2.7%	1.9%	3.1%	3.5%	4.7%
SR50 Growth (77-90) Index	-4.4%	-4.3%	5.1%	6.8%	7.0%	9.1%

Source: SuperRatings estimates

Pension returns also declined in June, with the median balanced pension option down an estimated -3.9%. The median growth option fell by -4.8% while the median capital stable option saw an estimated -2.0% return.

Pension returns to June 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	-3.9%	-4.0%	4.6%	6.3%	6.6%	8.8%
SRP50 Capital Stable (20-40) Index	-2.0%	-3.2%	2.0%	3.4%	4.0%	5.1%
SRP50 Growth (77-90) Index	-4.8%	-4.9%	5.4%	7.3%	7.6%	10.2%

Source: SuperRatings estimates

30 Years of Super Fund Performance

The chart below shows that the average annual return since the inception of the superannuation system is 7.0%, with the typical balanced fund exceeding its long-term return objective of CPI+3.0%. If we consider this in dollar terms $1 invested in the median super fund’s balanced option would now be worth approximately $7.67 depending on the impact of fees.

Perils of Timing the Market

We continue to emphasise the importance of setting a long-term strategy for your superannuation. We suggest members remain alert and review their superannuation settings such as whether they are in the most appropriate investment option for their situation and checking their fees. We encourage people not to panic and speak with their fund or an adviser they trust before making any changes to their superannuation settings.

We found that a member who had a $100,000 balance and switched to cash from a growth or balanced option at the onset of the pandemic in March 2020 would be $35,000 to $45,000 worse off as at the end of June 2022. We continue to emphasise that while markets do dip at points over time, they are expected to recover over the longer term.

The chart below shows that over the last 15 years a member in the typical balanced option would have seen a balance of $100,000 in June 2007 grow to $206,769. A member in a growth option saw their balance accumulate to $205,647.
International Shares options have performed the strongest with the median option rising to $209,107, though it has been a bumpy ride across global markets in the last few years. While the median Australian Shares option sat slightly below its global counterpart at $207,525.

Mr Rappell commented, “Members should prepare for continued volatility with a rocky road ahead for investment markets. If you are not approaching or in retirement, keep in mind that all market movements in the short term are not the real story as you can’t access your money now. You only realise that loss if you switch investment options or take your money out, which would take away the opportunity to participate in any future recovery.”

“Whereas the current situation is more concerning for those nearing or in retirement. Typically, we see these members sitting in investment options which are less exposed to these market movements which lessens the impact of the bumps. The silver lining of the recent interest rate rises is it will help those deriving an income from fixed income assets, following the anaemic cash rate levels we have seen in recent years.”

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

July 7, 2022/by Kirby Rappell

Media releases

Media Release: Get your Super fit for the new financial year

Leading superannuation research house SuperRatings estimates that the median balanced option fell by -0.9% in May, as funds face into global market headwinds.

The Reserve Bank of Australia increased rates for the second month in a row, signalling that it is facing inflation challenges head on, with a 50 basis point rise applied to the cash rate.

Our estimate of performance for the financial year ending 31 May 2022 has fallen slightly into the red at -0.3%, which is down from a return of 17.8% for the previous financial year.

Executive Director of SuperRatings, Kirby Rappell said, “It is not surprising to see a dampening in the performance of super funds, as the investment environment is very challenging lately. However, the benefits of diversification have been clear as the volatility of super fund returns remains much lower than share markets.”

Mr Rappell continued, “Whilst it has been a pretty challenging time for markets and savings, it is important to put this all into context. Superannuation is a long-term investment and funds have delivered strong performance on average over time. Markets and economies go through ups and downs, and while it’s hard to see your retirement nest-egg bouncing around, it’s important to remain focused on taking a long-term outlook and trying to avoid getting caught up in the noise.”

The median growth option declined by an estimated -1.2%. We saw capital stable options weather the storm somewhat, with a fall of -0.5% due to their greater exposure to bonds and cash.

Accumulation returns to May 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	-0.9%	1.6%	6.2%	6.5%	6.2%	8.3%
SR50 Capital Stable (20-40) Index	-0.5%	0.0%	3.0%	3.6%	3.8%	4.9%
SR50 Growth (77-90) Index	-1.2%	2.3%	7.6%	7.7%	7.2%	9.6%

Source: SuperRatings estimates

Pension returns also declined in May, with the median balanced pension option down an estimated -1.1%. While a drop of -1.3% was estimated for the median growth option and a fall of -0.6% was determined for the median capital stable pension option.

Pension returns to May 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	-1.1%	1.9%	7.1%	7.2%	6.9%	9.4%
SRP50 Capital Stable (20-40) Index	-0.6%	-0.2%	3.2%	3.9%	4.0%	5.3%
SRP50 Growth (77-90) Index	-1.3%	2.4%	8.3%	8.5%	7.9%	10.7%

Source: SuperRatings estimates

Financial Year Performance over Time

The chart below shows that the average annual return since the inception of the superannuation system is 7.1%, with the typical balanced fund exceeding its long-term return objective of CPI+3.0%. The estimated return of -0.3% for the financial year ending 31 May 2022 represents a slight dip and as you can see below, years in which performance has been negative are typically followed by bounce backs in returns and a positive outcome since 1992 is evident on average.

Check your Super

As a new financial year is approaching, now is the perfect time to think about your super and whether you have the settings right for your current situation. Running a health check on your super periodically is a great way to keep your super fit!

Investment: check whether the investment option you’re in suits the level of risk, or amount of bumpiness in your balance, you’re comfortable with. Most funds have a risk profile tool on their website that can help you decide which investment option is most suitable for you. Having a look at performance for your fund is also important.
Fees: check your fees. The typical total annual fee on a $50,000 account is approximately 1.1% of this balance. See how your fund compares to other funds and the broader market.
Insurance: check the type of insurance and level of cover you have. Changes introduced in September 2019 mean that new members under the age of 25 will not automatically be given insurance when joining a super fund and members with a balance of $6,000 or less will not have insurance unless they opt-in. There are tools on fund websites that can help you understand how much cover might be right for you.

Kirby Rappell commented, “Getting the foundations right for your super is the best way to put yourself in good stead for a lifestyle in retirement that meets your needs. It is also beneficial to contact your fund and obtain guidance, support and advice to help set those foundations. Funds also provide access to advice service on investments, insurance, retirement and other topics to help you through the journey. This may be available through your fund directly or by using an adviser that is part of their network. Contact your fund to see what is available and how much it will cost – putting in the effort now can make a big difference to your future self.”

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

June 10, 2022/by Kirby Rappell

Media releases

Media release: Super Funds Deliver Over the Long Term

Super fund performance continues to experience bumps along the road, with returns falling in April following a small positive return in March. Leading superannuation research house SuperRatings estimates that the median balanced option fell by 1.1% in April.

As inflation challenges become evident, the Reserve Bank of Australia increased rates for the first time since November 2010. The 25 basis point rise now sees the cash rate sitting at 0.35%.

Greater volatility has seen increased pressure on fund returns, with the financial year return for the period ending 30 April 2022 estimated to be 1.2% and further pressure emerging in May.

Kirby Rappell commented, “We have seen a significant pullback in super fund returns this financial year, with 2 months remaining. It is challenging to say whether super funds will end the financial year to 30 June 2022 in the red or the black at this stage, as it could go either way. However, we have seen funds continue to deliver above their investment objectives over the longer term which typically sit around CPI+3.0%. Sticking to a long-term strategy and blocking out short-term noise is as important as ever, with long-term performance being what really matters.

The median growth option declined by an estimated -1.5%. The fall in performance was lower for the capital stable option which invests more in defensive assets such as bonds and cash, with a decline of -0.7% estimated.

Accumulation returns to April 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	-1.1%	4.2%	6.5%	6.9%	6.7%	8.2%
SR50 Capital Stable (20-40) Index	-0.7%	1.0%	3.2%	3.7%	3.9%	4.9%
SR50 Growth (77-90) Index	-1.5%	5.0%	7.8%	8.1%	7.6%	9.4%

Source: SuperRatings estimates

A fall in pension returns was also determined in April, with the median balanced pension option down an estimated 1.4%, similarly the median growth option fell by 1.6%, while the median capital stable option was down an estimated -0.8%.

Pension returns to April 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	-1.4%	4.3%	7.3%	7.5%	7.2%	9.2%
SRP50 Capital Stable (20-40) Index	-0.8%	1.0%	3.5%	4.1%	4.2%	5.4%
SRP50 Growth (77-90) Index	-1.6%	5.2%	8.3%	8.7%	8.4%	10.4%

Source: SuperRatings estimates

Growth in Super Fund Balances

The ups and downs we have seen across investment markets has led to a bumpy ride for Australia’s super members over the last couple of years.

It’s hard to determine what it all means when looking at returns which are negative one month and positive the next. We remain focused on longer term performance which isn’t as affected by the short-term noise.

Kirby Rappell commented, “Looking back over the last 15 years, the median balanced option has added more than 120%, similarly members sitting in a typical growth option will have seen their retirement nest egg grow by around 121%.

We have seen the greatest increase among Australian Shares and International Shares options of 133% and 132% respectively; however, having your super solely invested in equities will result in more ups and downs due to the greater risk associated, so super funds’ default solutions are designed to better manage this volatility.

These results are despite the drawdowns members experienced following the invasion of Ukraine in February 2022, the impact of the pandemic so far, as well as the GFC period.

We found that a member who had a balance of $100,000 in April 2007 and switched to cash from balanced or growth at the end of March 2020 when the pandemic began would now be around $45-55,000 behind their position if they had not switched.

Kirby Rappell stated, “Making snap decisions can lead to a worse outcome and it’s best to set a long-term strategy and stick to it, as we see markets recover losses from these unexpected events over time.

The chart above shows that over the last 15 years a member in the typical balanced option would have seen a balance of $100,000 in April 2007 grow to $219,775. A member in a growth option fared slightly better with their balance accumulating to $221,058.

Australian Shares options have performed the strongest with the median option rising to $232,095. While the median International Shares option was not far behind at $231,540 despite the uncertainty we have seen across global markets in the last few years.

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

May 17, 2022/by Kirby Rappell

Media releases

Media release: Super Funds Bounce Back in March

A market bounce in March has supported super fund performance, with the global economy maintaining a reasonable degree of momentum. However, inflation concerns continue to mount as consumers face cost pressures.

The Reserve Bank of Australia kept rates on hold at a low of 0.1% citing ongoing inflation challenges and uncertainty due to the war in the Ukraine, although we see expectations of interest rate rises increasing.

Leading superannuation research house SuperRatings estimates that the median balanced option rose by 1.1% in March. Over the financial year to 31 March 2022, we see an estimated return of 2.4% for the median balanced option.

Kirby Rappell, Executive Director of SuperRatings said, “It is pleasing to see performance recover over the month, as we head towards the end of the financial year. It has been a rockier year for super fund members, although funds seem to be navigating the uncertainty reasonably well. While many Australians feel the impact of natural disasters and increasing inflationary pressures, super continues to support improved long-term financial security for many.”

“I’ve said it before and I will say it again, it is important to focus on the long-term when it comes to your superannuation. The rebound in performance over the March period reinforces this, if a member had switched when they saw performance fall in February, they would have locked in the loss instead of benefiting from the recovery we have now seen.”

The median growth option increased by an estimated 1.6%. The capital stable option, which has less exposure to equity markets in favour of bonds and cash, rose by 0.1%.

Accumulation returns to March 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	1.1%	7.6%	7.5%	7.5%	6.9%	8.4%
SR50 Capital Stable (20-40) Index	0.1%	3.1%	3.7%	4.0%	4.0%	5.1%
SR50 Growth (77-90) Index	1.6%	9.2%	9.0%	8.8%	7.7%	9.5%

Source: SuperRatings estimates

Pension returns have also risen in March, with the median balanced pension option up an estimated 1.2%, compared to an increase of 1.8% for the median growth option, while performance is estimated to be flat at 0.0% for the capital stable option.

Pension returns to March 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	1.2%	7.8%	8.3%	8.1%	7.4%	9.4%
SRP50 Capital Stable (20-40) Index	0.0%	3.1%	4.0%	4.5%	4.3%	5.5%
SRP50 Growth (77-90) Index	1.8%	9.6%	9.6%	9.3%	8.5%	10.6%

Source: SuperRatings estimates

We estimate that the return over the financial year to March 2022 is sitting at 2.4% as shown below. Further, since the inception of superannuation, we have only seen 4 negative financial year returns (FY02: -3.1%, FY08: -6.4%, FY09: -12.7%, FY20: -0.8%). The average annual return over this period sits at around 7.2% pa which is ahead of fund objectives which are typically inflation + 3.0% over rolling 10-year periods.

Evidently, while the superannuation road may be bumpy at times, over the longer-term the typical balanced option shows a positive story for Australians.

Kirby Rappell commented, “We are currently on track to end the 2022 financial year in positive territory, depending on how investment markets perform over the June quarter, though performance will be far more muted than that observed in FY2021. While it is pleasing to see performance recover over the month of March, superannuation should be viewed with a long-term lens as there will be ups and downs over shorter term periods.”

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

April 8, 2022/by Kirby Rappell