Median balanced option falls following invasion of Ukraine

15 March 2022
| By Liam Cormican |
image
image
expand image

The median balanced superannuation option fell by 0.8% in February in response to the invasion of the Ukraine heightening already elevated geopolitical tensions and supply chain pressures around the world, according to SuperRatings. 

However, over the financial year to date, members had seen an estimated return of 1.4% for the median balanced option, according to the research house. 

Kirby Rappell, executive director of SuperRatings, said: “There is a lot of uncertainty across the globe, which is amplifying ups and downs across investment markets. 

“The latest supply shock following the war between Russia and the Ukraine places further pressure on the cost of living and inflation levels and adds to the likelihood interest rate rises are approaching. 

“We continue to reinforce our previous messages regarding the importance of taking a long-term view when it comes to your superannuation. 

“While the latest global events are extremely concerning, most members are decades away from retirement. This means they have time to recover from any volatility incurred in the short-term.” 

Table</p>
<p>Description automatically generated

Pension returns also fell in February, with the median balanced pension option down an estimated 1.0%, compared to a fall of 1.1% for the median growth option and 0.6% for the capital stable option. 

Table</p>
<p>Description automatically generated

The research house said retirees and members approaching retirement were already facing challenges when it came to deriving a meaningful level of income in retirement, due to ongoing record low interest rate levels. It said this was compounded by stresses for many of the potential timing of transitioning to retirement. 

“The key concern for these Australians is the impact of withdrawing their funds at a time when the market has been impacted by some falls in asset prices,” it said. 

“Maintaining a long-term view is vital, we encourage people to speak to their fund or financial adviser before making any changes to their superannuation. Knee-jerk reactions could lead to poor outcomes if these aren’t in line with your long-term financial goals.” 

The typical balanced option had delivered a return of about 8%-9% per annum for super and pension members over the last 10 years, which SuperRatings said emphasised that the longer-term picture remained positive. 

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

3 days 16 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

3 days 16 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

3 days 17 hours ago