Super funds bounce back in March

A market bounce in March has supported superannuation fund performance with the median balanced option rising 1.1%, according to SuperRatings.

Over the financial year to 31 March, 2022, the median balanced option returned an estimated 2.4% but the research house warned of rising cost pressures and looming interest rate rises dampening returns moving forward.

Kirby Rappell, executive director of SuperRatings, said: “It is pleasing to see performance recover over the month, as we head towards the end of the financial year.

“It has been a rockier year for super fund members, although funds seem to be navigating the uncertainty reasonably well. While many Australians feel the impact of natural disasters and increasing inflationary pressures, super continues to support improved long-term financial security for many.

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“I’ve said it before and I will say it again, it is important to focus on the long-term when it comes to your superannuation. The rebound in performance over the March period reinforces this, if a member had switched when they saw performance fall in February, they would have locked in the loss instead of benefiting from the recovery we have now seen.”

Pension returns also rose in March, with the median balanced pension option up an estimated 1.2%, compared to an increase of 1.8% for the median growth option, while performance is estimated to be flat at 0.0% for the capital stable option.

Rappell said: “We are currently on track to end the 2022 financial year in positive territory, depending on how investment markets perform over the June quarter, though performance will be far more muted than that observed in FY2021.

“While it is pleasing to see performance recover over the month of March, superannuation should be viewed with a long-term lens as there will be ups and downs over shorter-term periods.”