The median balanced super fund option generated a 0.9 per cent return for March, according to estimates from SuperRatings, to be up 3.4 per cent for the first quarter of the calendar year.
The positive return recorded in March followed a -0.4 per cent return seen in February amid market volatility and a 3.0 per cent return in January on the back of a market rally.
According to the research house, while the Reserve Bank elected to pause at the beginning of April, significant uncertainty still remains over the future direction of the federal funds rate.
“While markets may anticipate a pause; there has been no pause in volatility as half of the previous eight months’ returns were negative, with further volatility remaining the outlook for the remainder of the financial year,” SuperRatings said.
Over the month of March, SuperRatings estimated that the median growth option rose by 0.9 per cent, while the median capital stable option rose by an estimated 1.0 per cent.
“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,” said SuperRatings executive director Kirby Rappell.
“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.”
Over the past 12 months, both the median balanced and growth options have generated a 0.6 per cent return, while the median capital stable option has generated a 0.9 per cent return.
Looking further back, the median balanced option has delivered an average annual return of 8.9 per cent over three years, 6.1 per cent over five years, and 6.9 per cent over seven years.
“While there has been significant ups and downs over each month in the year so far, superannuation remains a long-term investment for most and these shifts have a much smaller impact when considering 10-year performance,” said Mr Rappell.
“Funds are well equipped to navigate changing markets, with 10-year performance estimated to be 7.4 per cent and demonstrating resilience to date.”
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.