Super returns defy expectations amid increased volatility

Superannuation returns continued to defy expectations amid market volatility in a typically subdued time of year, with the median balanced option returning 1.1 per cent in September.

According to research house SuperRatings, with the median balanced option estimated to have delivered 3.4 per cent for the quarter, the result marks the strongest first quarter return since 2013.

Kirby Rappell, executive director of SuperRatings, said markets “continued their onward march” in September, supported by greater expectations of rate cuts.

The median growth option rose by an estimated 1.3 per cent on the month while the median capital stable option grew 0.8 per cent. On a quarterly basis, the median growth option returned 3.8 per cent, while the media capital stable option returned 2.7 per cent. 

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Looking at pension returns, all options saw an uplift. The median balanced pension option increased by some 1.2 per cent, while the median capital stable pension and the median growth pension option rose 0.9 per cent and 1.4 per cent, respectively.

“Funds have built up a solid start to FY25 over the first three months of the year,” Rappell observed.

“However, global tensions are rising and there is plenty of opportunity for members to see their balance go up and down over the coming months.”

He highlighted the path for rates in Australia remains less clear and more broadly, escalating tensions in the Middle East and a closely-contested presidential race in the US continue to fuel uncertainty.

“For most of us, super is a long-term investment, and we encourage members to formulate and stick to a long-term plan that is suitable for them,” he said.

“Funds provide a range of education, tools and advice that can help members work out a suitable strategy, or members can seek independent financial advice, just make sure to check on and be comfortable with any cost for advice before going ahead.”