Mano Mohankumar
Despite the market turmoil caused by President Trump’s ‘Liberation Day’ tariff announcements, super funds finished the month of April in positive territory with the median super fund (61 to 80 per cent in growth assets) up 0.6 per cent. That brought the return for the first 10 months of the 24/25 financial year to 5.8 per cent.
Senior Investment Research Manager, Mano Mohankumar, says that April’s result illustrates the importance of remaining patient and not getting distracted by short-term noise. “The higher-than and broader-than expected tariff announcements made by Trump early in the month sparked extreme market volatility, with Australian shares and hedged international shares down 6.5 per cent and 10.2 per cent respectively over the first week of April. However, his subsequent pause on tariffs on most countries resulted in a strong market rally, which has continued into May so far.
“Over the full month of April, developed international shares were only down 1.8 per cent and 0.4 per cent in hedged and unhedged terms, respectively, with the US underperforming most other regions. Australian shares were actually up a healthy 3.6 per cent over the same period. Bond markets were also up, with Australian and international bonds returning 1.7 per cent and 0.9 per cent, respectively.”
“If you panicked in early April and switched to a lower risk option or cash, not only would you have crystalised your losses, you would have also missed out on the market rebound. That’s why we remind members that super is a long-term investment and encourage them to see a financial adviser if they’re thinking of switching options.”
The table below compares the median performance to the end of April 2025 for each of the traditional diversified risk categories in Chant West’s Super Fund Performance Survey, ranging from All Growth to Conservative. All risk categories have generally met their typical long-term return objectives, which generally range from CPI + 1.5 per cent for Conservative funds to CPI + 4.25 per cent for All Growth.
Long-term performance remains above target
MySuper products have been operating for just over 11 years, so when considering performance, Mohankumar says it’s important to remember that super is a much longer-term proposition.
“Since the introduction of compulsory super in July 1992, the median growth fund has returned 8 per cent p.a. The annual CPI increase over the same period is 2.7 per cent, giving a real return of 5.3 per cent p.a. – well above the typical 3.5 per cent target. Even looking at the past 20 years, which includes three major share market downturns – the GFC in 2007-2009, COVID-19 in 2020, and the high inflation and rising interest rates in 2022 – super funds have returned 7.1 per cent p.a., which is still comfortably ahead of the typical objective.”
The chart below shows that for most of the time, the median growth fund has exceeded its return objective over rolling 10-year periods, which is a commonly used timeframe consistent with the long-term focus of super. The exceptions are two periods between mid-2008 and late-2017, when it fell behind. This is because of the devastating impact of the 16-month GFC period (end-October 2007 to end-February 2009) during which growth funds lost about 26 per cent on average.
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