Global uncertainty continues to weigh on super performance

Superannuation funds have experienced negative performance for the third month in a row, with October seeing returns of -1.6 per cent for median balanced options. 

According to SuperRatings, the median growth option declined by -1.9 per cent while the median capital stable option saw falls of -0.8 per cent due to lower share exposure. 

Last month, SuperRatings similarly reported negative returns for the third quarter of 2023 to 30 September, with the median balanced fund estimated to have lost 0.4 per cent over the quarter.

On a monthly basis, median balanced funds saw falls of -0.1 per cent in August and 1.8 per cent in September.

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During the financial year 2022–23, the median balanced super fund returned 8.5 per cent over the 12 months.

Kirby Rappell, executive director of SuperRatings, explained: “We have observed continued uncertainty around global markets and inflation, which has weighed on returns from shares.”

Pension returns also fell during the month of October. The median balanced pension option saw estimated returns of -1.8 per cent, alongside the median growth option that decreased by -2.2 per cent. 

Moreover, the median capital stable pension option delivered negative returns of -0.9 per cent. 

The executive director noted the persistent impact of high inflation, evident in RBA governor Michele Bullock’s cash rate rise of 25 bps to 4.35 per cent on Melbourne Cup Day (7 November).

“Despite the uncertain environment of the past quarter, returns remain positive over one through to 20 years. Super funds continue to display strong capabilities in navigating uncertain market environments and members have been experiencing increased levels of ups and downs for some time now,” Rappell said.

“Our message to members remains one of focusing on the long term and sticking with their long-term investment strategy. The ups and downs are likely to continue, and members who are thinking about changing their strategy are encouraged to contact their fund, or speak with a trusted adviser, before making any changes.”