Australia’s superannuation funds and Lance Corporal Jack Jones, a character from BBC sitcom Dad’s Army, are unlikely bedfellows.
Although they may not have expressed it that way, the essence of the advice from the funds to their 18 million members following the meltdown in the Australian and offshore share markets matches Jones’ catchphrase: Don’t panic.
These institutions, which managed A$4.1 trillion (US$2.5 trillion) of Australian retirement savings at 31 December 2024, are likely to have been bombarded with calls and emails from members worried about the drop in their balances caused by the plunge in equity prices triggered by United States tariffs and worries about a trade war and global recession.
Funds have been telling members to stick with their personal investment strategies, remember their retirement savings are invested for the long term, and read specially-created website pages and other content about market volatility.
Investing for the long term
Australia’s second largest fund Aware Super recommended members contact their fund or financial adviser before making significant changes, locking in short-term losses.
“We understand how unsettling market volatility can be, but it’s a normal part of the investment cycle,” Aware Super’s Head of Investment Strategy Michael Winchester said in a statement to Azzet.
A spokesperson for HESTA told Azzet it was “focused on managing investments and supporting members during this period of market volatility.”
The fund said people felt bad when they were “in the trough” because they were biased to feel recent events were more important than long-term trends and they wanted to avoid potential loss more than gain an equivalent amount.
“These biases perhaps helped our ancestors survive and are reasons why market volatility feels more concerning in the short term. However, they can also cause us to make hasty decisions,” HESTA said on its website.
CareSuper Chief Investment Officer Suzanne Branton said the fund designed its investment options with a diversified mix of asset classes to deliver strong long-term returns without relying on one driver like shares.
“Indeed, while shares have been declining more recently, other strategies in our portfolios have provided positive returns in reaction to the news on tariffs, such as fixed income,” Branton said in a statement.
Hostplus said it recognised short-term market movements were a natural part of investment cycles but took a long-term approach.
“Our portfolio is highly diversified across asset classes, industries, and global markets, ensuring resilience through different economic conditions,” Chief Investment Officer Sam Sicilia said in a statement to Azzet.
Talking to members
The nation’s largest super fund, the $365 billion AustralianSuper, had produced and updated content for its website and social media to help members understand market volatility and the risks of switching investment options in falling markets.
This included a webpage, video, information for call centre staff, internal and independent financial advisers, employer partners and other intermediaries, and a podcast that was in production.
An Insignia Financial spokesperson told Azzet it was communicating with clients and superannuation members about market volatility, and its MLC Asset management investment team and advisers often provide commentary on market behaviour.
“Superannuation is a long-term investment. We understand that recent market volatility has raised concerns for members. However, it is important to stay focused on long-term financial goals rather than short-term market fluctuations,” the spokesperson said.
Cbus prepared information and was holding webinars for members about market volatility while REST said it was directing members to a website page.
UniSuper recorded a special podcast with Chief Investment Officer John Pearce while investment specialist Annika Bradley featured on the Fear & Greed podcast.
‘Perfect storm’
Former super researcher Alex Dunnin told Azzet the industry had been buffeted by ‘a perfect storm’ of regulatory action over poor service, a cyberattack and the slide in financial markets which has negatively affected super fund members’ balances.
“The messages the funds will be pushing out will be tried and true: super is a long term game, don’t panic but that doesn’t mean you ignore it either,” said Dunnin, co-founder and former director of research and information provider Rainmaker Information.
“It's a really good time to make sure you really understand what asset classes you are in because not everyone is totally exposed to equities.
“Just because you’ve heard the American markets and the ASX go down, that’s not most of our super. It’s probably maybe half of our super.
“We’ve also had fantastic returns over the last 12 months so in lot of ways we might have wiped out the last six months, maybe 12 months of gains, but that’s on the back of a lot of years of stellar returns, so this is a bit of a wake-up call perhaps.
“This is a correction, albeit a savage correction, but superannuation is a long run game. If you are really worried about your super, it probably means you are in a fund you don’t trust.
“If you don’t think your fund knows what it’s doing, maybe wait until things have calmed down and think about whether you want to be in this fund anyway.”
