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Super funds maintain positive momentum

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A recovery has been observed in super fund returns as the year comes to a close.

On the back of the positive result seen in October, the median balanced super fund delivered a return of 2.6 per cent in November, according to new estimates released by SuperRatings.

The median growth option was reported to have increased by 3.2 per cent over the month, while the median capital stable option had an estimated gain of 1.6 per cent.

These latest results mean the median balanced fund has fallen by 1.3 per cent over the past calendar year, while the median growth and capital stable funds are both down by 1.4 per cent.

“Funds have faced a tough calendar year, though performance has improved over the last couple of months,” said SuperRatings executive director Kirby Rappell.

“If we see a small negative return or even a flat return for the typical balanced option for 2022, depending on how December plays out, this would be a better outcome than anticipated a couple of months ago.”

SuperRatings noted that an improvement in equity market sentiment has helped super funds to regain some of the losses suffered towards the start of the financial year, including a decline of 3.1 per cent for the median balanced fund in September.

Additionally, the research house suggested that despite the recent volatility, super is still a strong-performing investment over the longer term.

The median balanced fund has delivered an average annual return of 4.6 per cent over three years, 5.9 per cent over five years, 8.0 per cent over 10 years and 6.2 per cent since 2000.

“While we expect to see continued ups and downs over the coming year, the recent recovery is good news for members who focused on the long term and stuck to their investment strategy,” said Mr Rappell.

“As the end of the year approaches, we encourage members to review their superannuation with a focus on their long-term risk tolerance to ensure their super is set up for the year ahead.”

The average annual return for the median growth option was reported to be 5.5 per cent over three years, 6.8 per cent over five years and 9.3 per cent over 10 years.

Meanwhile, the average annual return for the median capital stable option was 2.1 per cent over three years, 3.2 per cent over five years and 4.7 per cent over 10 years.