Kirby Rappell
Despite the Reserve Bank of Australia raising rates at the start of the month superannuation balances continued to grow in February. Superannuation research house, SuperRatings, estimates the median balanced option rose by 1.1% over the month.
To the end of February, funds have delivered small but consistent positive returns in most months to drive a respectable 6.3% return for the financial year to date. However, with events currently occurring in the Middle East and inflation expectations pointing towards the potential of further rate increases, funds are likely to have an uncertain path towards the end of FY26.
The median growth option rose by an estimated 1.2% over February, while the median capital stable option is estimated to deliver 0.8% to members.
Pension returns delivered similar results with the median balanced pension option growing by an estimated 1.3%. The median capital stable pension option is estimated to return 0.9% over the month, while the median growth pension option is estimated to be in line with Balanced options returning 1.3% for the same period.
We have already seen significant movement in share markets over the beginning of March with super balances estimated to now sit below where they were at the beginning of February. The median balanced option is estimated to have fallen by -1.6% over March, while the median growth option lost -2.0% over the same period. The more defensively positioned Capital Stable option is also estimated to have taken a loss from the war, with an estimated -0.9% fall since the beginning of the month.
“The events currently occurring in the Middle East have brought fresh uncertainty to markets already feeling the pressure of expectations surrounding artificial intelligence”, commented Director of SuperRatings, Kirby Rappell. “While we have yet to fully see how returns will respond, it is worth remembering that when markets are more turbulent, the focus should be on long-term strategy and outcomes to ensure you reach your retirement goals. For any members that are concerned about their fund’s performance it may be helpful to seek advice before making a decision. Advice services are often available through the fund, or members can seek professional financial advice, just remember to confirm what costs, if any, are involved before proceeding with the advice”.
