Kirby Rappell
Leading superannuation research house SuperRatings estimates that the median balanced option will have recorded a -0.4% fall over the month of September. This loss was largely driven by the underperformance of Australian equities, which fell over 3% as sticky inflation prompted another increase to the cash rate by the Reserve Bank of Australia (RBA). Meanwhile, US markets were comparatively flat, with strong performers in the AI and technology space helping to offset weakness across the broader market.
The median capital stable option is also estimated to have declined by -0.4% in September, while the median growth option is estimated to fall by -0.5%.
Pension returns were also negative for the month, with the median balanced pension option down an estimated -0.5%. The median growth pension option and capital stable pension option are also estimated to fall -0.5% over the month.
“Stubborn inflation, concerns around economic growth and elevated energy prices are likely to remain headwinds for Australian shares over the coming months. This is also complicated by the anticipated tightening bias for the RBA. International equities face many of the same pressures, but have been supported by continued investor optimism around AI” commented Kirby Rappell, Director of SuperRatings. “However, the sustainability of those gains depends on whether companies involved in the AI ecosystem are able to deliver on the levels of growth anticipated by markets.”
“Superannuation remains a long-term investment, and members may have many years, even decades, to ride out the short-term ups and downs of the market” Mr Rappell continued. “Diversification remains valuable, with super funds investing their members’ money across a wide range of asset classes, sectors, and global regions to help them achieve positive long-term financial outcomes. It’s worth noting that since the bottom of the global financial crisis in 2009, super funds have returned 7.8% per annum to members invested in the median balanced option. SuperRatings encourages members who are considering making changes to their investment strategy, or those uncertain whether their strategy aligns with their current circumstances and stage of life, to first speak with their fund or a trusted professional financial adviser.”