Access our news and insights

Stay up to date with the latest views and analysis from the team.

SuperRatings   ⟩   News & Insights   ⟩   Media releases   ⟩   Sustained volatility fails to dent long-term super returns
Gordon Toy

AuthorGordon Toy

DateApril 18, 2018

CategoryMedia releases

Share

Australian super fund members have suffered a second monthly decline in returns in as many months as volatility shakes global markets and creates an environment not seen by most super members in a decade. However, median balances are well ahead for the financial year to date and superannuation remains one of the best investments over the last ten years.

These are just some of the findings from superannuation research house SuperRatings, which has reported an interim return of -0.7% in March for members in a balanced option. Members in a growth option (growth assets of 77–90%) fared worse with a monthly decline of -1.1%, while those exposed to Australian shares only, suffered a much larger -3.1% decline. The cash index was the only one to record gains with growth for the month of March of 0.1%.

It’s not all bad news, with super members in a balanced option still ahead for the financial year to date with growth of 5.7% and a rolling one-year average of 8.0%. Over the last ten years the median balanced option has returned 5.9% per annum with $100,000 invested in 2008 now worth $171,335. However, being in the right fund makes all the difference with the best performing balanced option outperforming the worst by more than $50,000 over the ten-year period.

Growth in $100,000 invested over 10 years to March 2018*

Source: SuperRatings

*Interim results only

The SuperRatings data also reveal the impact on super returns from exposure to global equities with the median international share index outperforming most other fund categories over the last ten years. Super members who had invested $100,000 in an international share index a decade ago would now have $188,240 compared to $171,335 for the balanced option.

Growth in $100,000 invested over 10 years to March 2018

Source: SuperRatings

SuperRatings CEO Kirby Rappell believes that the latest data is another reminder that despite ups and downs superannuation remains one of the best wealth generating options available. However, super members will have to adjust to the return of volatility.

“That latest market turmoil has had a short-term impact on super returns”, said Mr Rappell. “However, it remains overwhelmingly the case that superannuation continues to deliver strong returns to members over the medium to long term and is one of the most important sources of wealth for Australians.”

“Volatility is undoubtedly emerging as the new normal presenting an environment that many super members have not experienced in a decade. This volatility needs to be managed but no one should lose sight of the fact that super continues to deliver strong returns.”

The SuperRatings data shows that REST and CareSuper were the best performing balanced options over the last decade for those in the accumulation phase with returns of 7.1% per annum. Among growth funds, CareSuper performed best over the same period recording returns of 7.5% per annum, followed closely by HOSTPLUS and Energy Super.

Source: SuperRatings

*Return over 10 years to 28 February 2018. Includes public offer funds only

Source: SuperRatings

*Return over 10 years to 28 February 2018. Includes public offer funds only

Release ends

Warnings: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to “General Advice” (as defined in the Corporations Act 2001(Cth)) and based solely on consideration of the merits of the superannuation or pension financial product(s) alone, without taking into account the objectives, financial situation or particular needs (‘financial circumstances’) of any particular person. Before making an investment decision based on the rating(s) or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances, or should seek independent financial advice on its appropriateness. If SuperRatings advice relates to the acquisition or possible acquisition of particular financial product(s), the reader should obtain and consider the Product Disclosure Statement for each superannuation or pension financial product before making any decision about whether to acquire a financial product. SuperRatings research process relies upon the participation of the superannuation fund or product issuer(s). Should the superannuation fund or product issuer(s) no longer be an active participant in SuperRatings research process, SuperRatings reserves the right to withdraw the rating and document at any time and discontinue future coverage of the superannuation and pension financial product(s). Copyright © 2018 SuperRatings Pty Ltd (ABN 95 100 192 283 AFSL No. 311880 (SuperRatings)). This media release is subject to the copyright of SuperRatings. Except for the temporary copy held in a computer’s cache and a single permanent copy for your personal reference or other than as permitted under the Copyright Act 1968 (Cth.), no part of this media release may, in any form or by any means (electronic, mechanical, micro-copying, photocopying, recording or otherwise), be reproduced, stored or transmitted without the prior written permission of SuperRatings. This media release may also contain third party supplied material that is subject to copyright. Any such material is the intellectual property of that third party or its content providers. The same restrictions applying above to SuperRatings copyrighted material, applies to such third party content.

For more information contact:

Gordon Toy
03 9623 6373
Gordon.Toy@lonsec.com.au

Related stories

25 Oct 2018 - Voluntary superannuation contributions have eased slightly after approaching record highs as super members appeared to take a breather after riding the bull ...

Voluntary super contributions ease

By Gordon Toy Read now

20 Sep 2018 - Ten years since the collapse of US investment bank Lehman Brothers, Australia’s superannuation funds have accumulated over $1 trillion in retirement savings, ...

Don’t panic! What superannuation is teaching the post-GFC world

By Gordon Toy Read now

11 Sep 2018 - Leading superannuation research house SuperRatings is deepening its actuarial capabilities, with key new hires catering to further growth in its consulting ...

SuperRatings expands actuarial team

By Gordon Toy Read now