Research house SuperRatings estimates the median balanced superannuation option returned 1.5 per cent in July, as markets absorbed ongoing volatility and maintained a surprisingly steady footing following the turbulence sparked by earlier tariff announcements.
“Markets continue to be taking news in their stride at present,” said SuperRatings executive director Kirby Rappell, pointing to resilience in both domestic and international sharemarkets, which began the year with positive returns.
Growth-oriented super options rose by an estimated 1.8 per cent in July, while the median capital stable option delivered a more modest 0.7 per cent. Pension products followed a similar pattern, with the median balanced pension option up 1.6 per cent.
The latest results come off the back of a successful FY2024–25, in which the median balanced option delivered an estimated 10.1 per cent. But SuperRatings cautioned that while the early signs for FY25–26 are positive, the year ahead is unlikely to be smooth.
The firm’s insights manager, Joshua Lowen, said periods of sustained strong returns can encourage investors to take on greater risk by increasing equity exposure.
“There is the risk of making investment decisions based on short-term performance outcomes,” he told InvestorDaily.
Lowen identified a mix of global and domestic headwinds, including high equity valuations, lingering inflation concerns and uncertainty over future trade policy that could test markets over the next year.
He also pointed to the precarious US–China trade truce, the potential for US President Donald Trump to raise tariffs on Russia should the Ukraine conflict remain unresolved, and persistent geopolitical tensions in the Middle East as areas to watch.
AMP chief economist Shane Oliver echoed those concerns, noting that sharemarkets were trading on stretched valuations and could be sensitive to negative surprises.
“Sharemarkets have certainly surprised me in terms of their strength but there is no change to my view of a 6–7 per cent return for super funds this financial year,” Oliver told InvestorDaily, noting his earlier expectation that FY25–26 would deliver more modest gains.
“July is usually strong from a seasonal perspective, but August and September can often be rougher so I still expect uncertainties around the impact of the tariffs and possible threats like a US government shutdown next month at a time of stretched valuations to drive a bit of near-term volatility,” Oliver added.
Still, the chief economist sees several factors that could underpin returns in the year ahead.
“More rate cuts including from the Fed starting in September, Trump pivoting to focus on more market-friendly policies and more RBA rate cuts along with subdued but OK economic growth,” he said.
For his part, Lowen emphasised that July’s 1.5 per cent result was a strong start to the year, particularly given it was only slightly below the 1.9 per cent recorded for the same month in 2024.
“We would say anything in that 1.5 or above per month range builds up over the year quite quickly,” he said.
Looking ahead, he said super accounts may see “some softening” over the next two months given August and September’s historically weaker sharemarket returns but stressed that a modest slowdown was not his main concern.
“The bigger risk is if it’s a shock that causes negative returns for a month, which may or may not occur, it’s just something to be aware of,” he said.
