Super Nation is a fortnightly column that examines, explains and analyses key issues in one of Australia's largest, fastest-growing and most important industries: superannuation.
Superannuation funds speak almost with one voice during sharp market downturns.
The essence of their message to fund members nervously watching the value of the retirement savings fall is to stay invested rather than go to cash because markets will eventually rebound.
Implicit, if not expressed explicitly, is the importance of understanding that nobody can be certain about picking the bottom of any market.
“So I'll finish on my favourite, most important lesson: time in the market beats timing the market,” UniSuper Chief Investment Officer John Pearce said in an investment update for April 2026.
Pearce said the recovery in share markets since 23 March showed investors did not expect the surge in oil prices following the U.S. attack on Iran on 28 February to derail growth in corporate profits.
Less fearful
He pointed to the fact that the CBOE Volatility Index (or VIX), measuring market fear, had not spiked as much during the Iran conflict as the Liberation Day sell-off in April 2025, when United States President Donald Trump announced sharp increases in tariffs.
“Compare that to the recent episode. We see nowhere near the same level of fear. And in fact, as we speak today, that fear is all but dissipated,” said Pearce, whose fund manages $166 billion for more than 680,000 members.
He said the reduced level of fear did not mean the oil was falling back to the US$65 a barrel price it was trading at before the attack from levels above $100.
It was “a really big deal” that Iran had responded by blocking the Strait of Hormuz, the waterway through which 20% of the world's oil and gas and 30% of the fertiliser passed.
“I think a more likely interpretation is this, that even if oil stays elevated, even if this conflict is not going to be resolved sometime, it's not going to be enough to derail global growth,” said Pearce.
“In particular, it won't be enough to derail the growth in corporate profits that have been driven by investment super cycles.”
The same point was made by AustralianSuper, Australia’s largest super fund, which noted the VIX had yet to reach the levels seen in April 2025.
“While we’ve seen more unpredictability recently, it’s important to keep perspective,” AustralianSuper said in its last quarterly update.
Rewarding patience
The market turnaround was noted by research, data and analytics provider Chant West which said the average median growth fund (61–80% invested in growth assets) fell 3.2% in March but rose 3.1% in the first 22 days of April
“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,” Head of Superannuation Investment Research Mano Mohankumar 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.”
A fund that exploited the market downturn was Australian Retirement Trust (ART), which uses a dynamic asset allocation (DAA) strategy to change its mix of assets in response to short-to-medium-term market opportunities and risks.
This contrasts with a strategic asset allocation (SAA) approach, which sets long-term targets for asset mix.
Senior Portfolio Manager Jimmy Louca said ART, which manages more than $370 billion for more than 2.4 million people, had bought Japanese and European shares and bonds and Australian and British bonds following the outbreak of the conflict.
In media interviews, he disclosed the fund had increased its trading threefold due to market volatility compared with the usual weekly changes in asset allocation.
“Whereas in something like this, we're trading almost every day, and this drawdown is still early and still going ... If (the decline) picks up, we will pick up our activity to take advantage of cheaper assets," he said in a Reuters article published on 31 March.
An insight into how another large super fund approaches episodes like this came from MLC Asset Management, which manages more than $226.5 billion in assets for 1.5 million people, including $86 billion in super for more than 800,000 people.
MLC saw diversification benefits from alternative insurance-related investments, unlisted infrastructure and property, and private equity and had a relative preference for share markets outside the United States with more attractive valuations.
“We are strong advocates of active portfolio management because markets move and change, and psychological factors can cause hasty actions by some market participants,” MLC, which is part of Insignia Financial, said in a news article.
“This creates opportunities for those who can look through events and buy good assets at attractive prices.”
AustralianSuper, with more than A$410 billion under management for 3.6 million-plus members, said its long-term active security selection had positioned its portfolio well as outperformance shifted to the energy, materials and utilities sectors in the March quarter from the global mega-cap technology stocks that previously dominated.
“As an active investor, we continue to adapt to changing conditions, managing risk and investing in attractive opportunities to grow members’ super,” it said.
“Market volatility can lead to the mispricing of assets and market drawdowns can create buying opportunities for long-term investors like us.”
