Super funds plummet

RETIREES URGED NOT TO PANIC

SUPERANNUATION fund accounts have taken a battering in recent weeks amid the deadly coronavirus outbreak, delivering negative returns of 6.5 per cent.

This means, on $100,000 in super, a member’s balance would have fallen to just $93,500 since the beginning of February.

Despite this, new analysis by super research firm Chant West showed for the financial year-to-date returns were flat, despite a tumultuous February and March.

The ASX200 fell 3.6 per cent yesterday and has decreased by 20.1 per cent since February 20, ripping $430 billion from the value of the nation’s top 200 companies.

Global markets have been pummelled, hurting those who have their retirement savings heavily invested in shares.

Funds have reported an increase in members contacting their funds in recent weeks to massage their investment options and move away shares, instead opting for a conservative option.

Chant West’s research manager Mano Mohankumar urged people not to panic because “super’s a long-term investment”. “You don’t want to get distracted by short-term noise and we caution members who try and time the market,” he said.

HostPlus’s chief investment officer Kristian Fok said for those opting to keep their super invested in the safer option of cash, “it will not keep up with your living standards”.

Many returns on cash savings account are less than 1 per cent.

“We have seen more people moving away from growth options to conservative options,” Mr Fok said.

He said 80 per cent of their 800,000 members are invested in growth assets and there’s been a zero per cent return on their growth option so far this financial return.

Figures from Industry Super Australia showed savers who moved the average balance industry fund into cash during the global financial crisis were $4000 worse off after three months, $13,800 over a year and $34,800 after five years.

One of the nation’s largest super funds, AustralianSuper’s chief investment officer Mark Delaney urged members to think carefully before changing how their retirement money is invested.

“When people see their super balance fluctuate it can tempt them to change investment options,” he said.

“If you’re investing for the long term you’re going to have events like the one we are experiencing now but the longterm smooths things out.”

AustralianSuper has more than 2.1 million members and $180 billion of funds under management.