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Market headwinds push super fund returns into the negative for FY22

4 minute read

The median balanced super fund lost nearly 1 per cent in May as market volatility continued.

SuperRatings has estimated that the median balanced super fund option fell by 0.9 per cent during May, with returns edging into the red over the current financial year.

The median balanced fund was reported to be down 0.3 per cent for FY22 as of the end of May, significantly below the 17.8 per cent return seen during FY21.

For the median growth option, a loss of 1.2 per cent was recorded for the month while the median capital stable option with greater exposure to bonds and cash fell 0.5 per cent.


“It is not surprising to see a dampening in the performance of super funds, as the investment environment is very challenging lately,” said SuperRatings executive director Kirby Rappell.

“However, the benefits of diversification have been clear as the volatility of super fund returns remains much lower than share markets.”

During the past calendar year, the median balanced fund has returned 1.6 per cent. Looking further back, SuperRatings said that this option had delivered an average annual return of 6.2 per cent over three years, 6.5 per cent over five years and 8.3 per cent over ten years.

The median growth fund has grown 2.3 per cent over the past year while the median capital stable fund was flat with a return of 0.0 per cent.

SuperRatings noted that, since the introduction of compulsory super in 1992, the average annual return for the median balanced option has been 7.1 per cent, above the typical long-term return objective of CPI plus 3 per cent.

“Whilst it has been a pretty challenging time for markets and savings, it is important to put this all into context. Superannuation is a long-term investment and funds have delivered strong performance on average over time,” said Mr Rappell.

“Markets and economies go through ups and downs, and while it’s hard to see your retirement nest egg bouncing around, it’s important to remain focused on taking a long-term outlook and trying to avoid getting caught up in the noise.”

The super research house also pointed out that years of negative performance have typically been followed by a bounce back in returns. 

A negative return in FY22 would only be the fifth time in the history of compulsory super that the median balanced fund has suffered a financial year decline.

Mr Rappell suggested that the end of the financial year provided a good opportunity for Australians to run a ‘health check’ on their super.

“Getting the foundations right for your super is the best way to put yourself in good stead for a lifestyle in retirement that meets your needs. It is also beneficial to contact your fund and obtain guidance, support and advice to help set those foundations,” he said.

Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.