POWERED BY MOMENTUM MEDIA
Inflation pinch drives slightly negative super returns
With SuperRatings estimating a 0.2 per cent loss on the median balanced option in May, inflation and tightening monetary policy have continued to affect fund returns.
The median growth option fell by an estimated 0.3 per cent in the month while the median capital stable option was estimated to decline by 0.2 per cent.
However, the research house still expected super funds to manage a return above inflation for the last 12 months, estimating financial year to date returns on a balanced option to be 7.9 per cent as at the end of May.
Kirby Rappell, executive director of SuperRatings, said: “While May saw a small fall, funds are currently on track to deliver a return in excess of inflation, so funds have kept the value of members’ money from diminishing in a high inflation environment, which has been no simple task.”
In terms of pension returns, the median balanced option was an estimated 0.3 per cent decline.
The median capital stable pension option fell by an estimated 0.2 per cent over the month and the median growth pension option was also predicted to fall by some 0.3 per cent.
Rappell added that inflation and monetary policy in response to inflation were the most influential factors for super performance this financial year and was expected to persist into FY24.
“Super fund returns have had a bumpy year with markets facing several shocks over the last 11 months; however, funds continue to navigate the challenges well with most accounts seeing growth over the course of the full year,” Rappell said.
Looking at the numbers in dollar terms, members with $100,000 invested in the balanced option at the start of July 2022 would have an estimated $107,833 in their account at the end of May, not accounting for administration fees or any insurance premiums they may pay.
For members investing in the more defensive capital stable option, they would have some $104,677 with smaller ups and downs throughout the year, while members that limited their investments to cash would have a lower overall balance of $102,358 while seeing small gains each month.
“This demonstrates that fund’s investment strategies are behaving as expected by trading off between account growth and a smooth return, even in such uncertain times,” SuperRatings added.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
Recommended for you
Governor Bullock took a more hawkish stance on Tuesday, raising concerns over Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
