Super funds have had a modest start to 2021, but members should be ready for a “bumpy ride” ahead of vaccine distribution.
January marked the 10th consecutive month of gains for super funds, with the average median balanced option and media growth option both returning an estimated 0.4 per cent as markets responded to “mixed news” around the pandemic.
“Super funds have had a promising start to 2021, but the pandemic isn’t over yet. Movements in financial markets are still closely tied to how governments are managing new COVID-19 cases, as well as the timing and efficacy of vaccines. In short, we expect more ups and downs in the market, and super funds are not immune,” said SuperRatings executive director Kirby Rappell.
SuperRatings warned that members should prepare for a “bumpy ride” despite announcements around vaccine distribution, noting that it will take time to inoculate the population and that new variants of COVID-19 could leave markets exposed to significant downside risk.
However, the superannuation industry has shaken off much of the damage sustained in early 2020 and looks well prepared for more, Mr Rappel said.
“One thing that was reinforced in 2020 is that Australia’s superannuation system is built to withstand market storms and even pandemics. Overall funds are focused on the risks and opportunities that lie ahead. To date, they have shown the ability to manage their investment positions and provide the additional support that many members need in this environment,” Mr Rappel said.
One of the peak superannuation bodies has claimed that industry funds have “significantly outperformed” their retail counterparts and ca...