After a horror 2022, super returns closed out March and the first quarter of 2023 in positive territory amidst a volatile economic climate.
Monthly analysis from super industry research group SuperRatings found the median balanced option returned 0.6 per cent in March, with a 3.4 per cent return for the first three months of the year.
The median growth option also rose an estimated 0.9 per cent in March, while the median capital stable option rose by an estimated 1 per cent for the month.
The results reflect the volatility of the market after a 3 per cent return in January and -0.4 per cent in February.
Finishing the month in positive territory is a good result considering the rates of inflation and the Reserve Bank of Australia’s (RBA) relentless campaign of rate rises putting pressure on all sectors of the economy.
The RBA mercifully paused rate rises in April, but is expected to resume lifting rates from next month. Whether or not it does raise rates will depend on the results of the March quarter consumer price index (CPI) data, due to be released by the Australian Bureau of Statistics (ABS) on 26 April.
Kirby Rappell, executive director at SuperRatings, says the positive first-quarter returns demonstrate how important it is to get the management of your investments right – especially in uncertain conditions.
“Super funds continue to demonstrate their ability to capture upside benefits for members when they are available in the market while managing for market volatility through diversification,” he says.
“As we edge closer to the end of the financial year, the outlook feels slightly more stable, although there is still a chance that annual returns could drop back into negative territory depending on the final quarter of the financial year.
Mr Rappell says that while it may feel as though the past year put extreme pressure on investment returns, super actually weathered the storm pretty well. And most importantly they are still giving positive returns over longer periods, which is the intent of superannuation.
“While there have been significant ups and downs over each month in the year so far, the estimated financial year to 31 March return sits at 6.6 per cent.
“Superannuation remains a long-term investment for most and these shifts also have a much smaller impact when considering 10-year performance. Funds are well equipped to navigate changing markets, with 10-year performance estimated to be 7.4 per cent and demonstrating resilience to date” Mr Rappell added.
How did your super perform in March? Are you on track to end the financial year in positive territory? Let us know in the comments section below.
Also read: Top rating superannuation products named
