Kirby Rappell
Following a subdued start to the financial year in July, super funds experienced stronger growth in August with leading superannuation research house SuperRatings estimating that the median balanced option returned 0.8% to members over the month.
“Despite persistent inflation and ongoing geopolitical uncertainty, the first two months of FY27 have seen super funds deliver a solid start to returns for their members,” commented Kirby Rappell, Director of SuperRatings.
The median growth option grew by an estimated 1.0% in August, while the median capital stable option is estimated to rise a more modest 0.4%.
Similar performance was also delivered to pension members, with the median balanced pension option increasing by an estimated 0.9%. The median capital stable pension option is estimated to have returned 0.4% over the month, while the median growth pension option is estimated to have returned 1.0% for the same period.
Despite the positive start, rising commodity prices resulting from the ongoing US-Iran conflict, as well as expectations of rising interest rates at home mean the investment outlook for the coming months remains unclear. Members that are considering making changes to their investment strategy should keep in mind that superannuation is a long-term investment and they may have many years or even decades ahead in which to remain invested.
“Super funds have generated pleasing results to members in the opening months of the new financial year,” continued Mr Rappell. “However, moderating consumer demand, ongoing geopolitical instability, the prospect of further rate hikes and continued volatility within the artificial intelligence sector all have the potential to create investment headwinds. While the current environment is undoubtedly a challenging one, members should be encouraged by the fact that super funds have delivered members a return of more than 7% per annum since the introduction of the superannuation guarantee in 1992. SuperRatings encourages members concerned about market volatility to reach out to their fund or a trusted professional financial adviser to help ensure any changes to their investment strategy are aligned to their best long-term outcomes.”
