A sharemarket rally in April which lifted superannuation fund returns to 6% this financial year (FY26) was a reminder to stay patient, according to Chant West.
The research, data and analytics provider said the average median growth fund (61–80% invested in growth assets) had fallen 3.2% in March due to the United States-Iran conflict and renewed concerns about interest rates amid rising inflation.
However share markets had since rallied strongly with the same fund estimated to be up 3.1% so far in April.
“That almost entirely offsets the March decline and brings the estimated median return over FY26 up to 6%, with about 10 weeks of the financial year remaining,” Chant West said.
Head of Superannuation Investment Research Mano Mohankumar said the April rally had been on the back of optimism around a potential de-escalation in Middle East tensions, easing oil prices and solid corporate earnings.
“The experience since the start of March is another clear reminder of why it’s important for super fund members to stay patient and maintain a long‑term perspective,” he said.
“Members who panicked after seeing their balances fall in March and switched to lower‑risk options or cash not only crystallised paper losses, but also missed out on the subsequent V‑shaped rebound.
“Over time, missing out on returns like these can make a significant difference to a member’s balance at retirement due to the power of compounding.”
Mohankumar said Chant West reminded members that super was a long-term investment and encouraged them to see a financial adviser if they were thinking of switching options.
Since the introduction of compulsory super in July 1992, the median growth fund had returned 7.9% per annum, compared with the annual inflation rate of 2.7%, giving a real return of 5.2%, well above the typical 3.5% target.
“Even looking at the past 20 years, which includes three major share market downturns – the GFC (global financial crisis) in 2007-2009, COVID-19 in 2020, and the high inflation and rising interest rates in 2022 – super funds have returned 6.5% p.a., which is still ahead of the typical objective,” he said.
