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Super funds bounce back after three months of decline

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Funds delivered strong returns in November, according to the latest estimates from SuperRatings, despite uncertainties around inflation, markets and interest rates.

Research house SuperRatings has estimated that the median balanced superannuation option delivered a return of 3.1 per cent in November.

The strong result came after three months of decline for the median balanced option, with falls of -0.1 per cent in August, -1.8 per cent in September and -1.6 per cent in October.

SuperRatings noted that super funds bounced back during November after expectations of peak inflation resulted in positive returns across most sectors of the market.

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“Despite the uncertainties around inflation, markets and rates, we have seen funds recording strong returns into Christmas,” said executive director Kirby Rappell.

The median growth super option delivered an estimated return of 3.5 per cent for the month, while the median capital stable option generated a more modest return of 2 per cent due to its lower exposure to shares.

According to SuperRatings, November’s estimated returns have offset most of the losses observed in recent months, “setting up a modest, but positive, scene for most members as they approach the halfway point of the financial year”.

For the first five months of the financial year, the median fund is estimated to be up by 1 per cent. Meanwhile, over the first 11 months of the calendar year, SuperRatings said that the median balanced option is up by 6.8 per cent.

While December’s performance remains to be seen, the firm said that fund members will likely see a “reasonable positive return” over 2023, which may be similar to the estimated 6.4 per cent p.a. return recorded for the median balanced option since 2000.

“We continue to believe that inflation will be a strong driver of markets in 2024, coupled with softening consumer demand; however, most members should remain reassured by super funds ability to navigate the range of market conditions we’ve seen over the past few years,” Mr Rappell continued.

“December has been more mixed for shares so far, however there is still potential for a Santa rally in the second half of the month, and we encourage members to remain focused on their long-term outcomes.”

Super funds bounce back after three months of decline

Funds delivered strong returns in November, according to the latest estimates from SuperRatings, despite uncertainties around inflation, markets and interest rates.

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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.

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