The outlook for returns from Australian superannuation funds this financial year is uncertain after falls in March and despite respectable outcomes to the end of February, according to SuperRatings.
The superannuation research house estimated the median balanced option generated a return of 1.1% in February, despite the Reserve Bank of Australia raising interest rates at the start of the month, and 6.3% in the 2026 financial year (FY26).
“However, with events currently occurring in the Middle East and inflation expectations pointing towards the potential of further rate increases, funds are likely to have an uncertain path towards the end of FY26,” SuperRatings said in a media release.
The median growth option rose by an estimated 1.2% in February, while the capital stable option was estimated to have delivered 0.8% to members, giving them financial year to date (FYTD) returns of 7.3% and 4.0% respectively.
Pension members benefited from the tax concessions with the median and growth options returning 1.3% in February, lifting the FYTD returns to 7.2% and 8.1% respectively, and the capital stable option delivering 0.9% in January (4.5%).
“We have already seen significant movement in share markets over the beginning of March with super balances estimated to now sit below where they were at the beginning of February,” it said.
The median balanced option is estimated to have fallen by 1.6% in March, with the median growth option down 2.0% and the more defensively-positioned Capital Stable option off by 0.9% fall since the beginning of the month.
“The events currently occurring in the Middle East have brought fresh uncertainty to markets already feeling the pressure of expectations surrounding artificial intelligence”, SuperRatings Director Kirby Rappell said.
“While we have yet to fully see how returns will respond, it is worth remembering that when markets are more turbulent, the focus should be on long-term strategy and outcomes to ensure you reach your retirement goals."
