Another month of gains in super

Funds bounce back

SUPERANNUATION funds have notched up a 10th straight month of gains as they bounce back from last year’s pandemic shock, but they are not out of the woods yet.

Research organisation SuperRatings found January produced a 0.4 per cent return for both the median balanced option and the median growth option, in what analysts termed “a small but positive result”.

The median capital stable option eked out a 0.1 per cent gain, SuperRatings data showed.

Over the financial year to date median balanced options have returned 9.1 per cent, reflecting the speed at which the market has recovered after crashing in March 2020.

SuperRatings said current trends indicated the superannuation market was “in good health and well positioned for 2021” despite the emergence of new COVID-19 variants and rolling lockdowns that have hit most Australian states in recent weeks and months.

SuperRatings chief Kirby Rappell said superannuation holders should prepare for a bumpy ride.

“Super funds have had a promising start to 2021, but the pandemic isn’t over yet,” Mr Rappell said.

“Movements in financial markets are still closely tied to how governments are managing new COVID-19 cases, as well as the timing and efficacy of vaccines. In short, we expect more ups and downs in the market, and super funds are not immune.”

The ASX200 finished 0.91 per cent higher at 6868.9 points on Monday. It is up 4.3 per cent since the start of January and 16.5 per cent this financial year.

“One thing that was reinforced in 2020 is that Australia’s superannuation system is built to withstand market storms and even pandemics,” Mr Rappell said.

“Overall funds are focused on the risks and opportunities that lie ahead. To date, they have shown the ability to manage their investment positions and provide the additional support that many members need in this environment.”

But Super Consumer Australia director Xavier O’Halloran said it was important to look beyond the January gains.

“You don’t want people focused too much on what’s happening quarter to quarter or month to month,” he said.

“It’s a long term game. It’s designed to be the savings for the last 20-30 years of your life. Time in the market is better than timing the market.”