Australians are being urged to hold their nerve and focus on long term returns when markets get uncertain.
According to independent research agency SuperRatings, the average super fund's balanced option for the last quarter is in negative returns.
It's important during these times people focus on 5, 7 and 10 year returns.
But Industry Super Australia chief executive Bernie Dean said people should remember that superannuation is a long-term savings vehicle.
"Superannuation is usually well placed to weather market volatility," said Dean.
"Despite 2018 volatility, returns over the decade are still exceptionally strong."
ISA analysis of SuperRatings data show that $100,000 invested in 2008 in the median Balanced option would now be worth $206,366. In the median Growth option it would be worth $217,721.
Comparison of SR50 Balanced Index options to Nov 2018
| Monthly % |
Quarterly % |
FYTD % |
1 Year % |
3 Year % |
5 Year % |
7 Year % |
10 Year % |
|||||
| Industry |
-0.57 |
-3.41 |
-1.22 |
2.90 |
7.25 |
7.51 |
9.20 |
8.03 |
||||
| Bank-owned |
-0.80 |
-4.68 |
-2.84 |
-0.51 |
4.57 |
5.32 |
7.32 |
6.60 |
||||
| Outperformance |
0.23 |
1.27 |
1.62 |
3.41 |
2.68 |
2.19 |
1.88 |
1.43 |
Source: ISA analysis of SuperRatings Fund Crediting Rate Survey, Nov 2018
And of course, industry funds, on average, continue to outperform their rivals.
ISA's analysis of SR50 Balanced Index Options show that industry funds have on average outperformed bank owned retail funds on a monthly, quarterly, 1, 3, 5, 7 and ten year basis (see table above).
There are also some tips to avoid unnecessary wastage from your super in times like these.
1. Consider focusing on the long-term net performance of your fund.
2. Make sure you consider consolidating any multiple accounts to avoid duplicate fees and insurance premiums.
3. Check you are being paid the super you are entitled to. Employers have three months to put super into a worker's super account, so a wage slip does not always reflect actual payment. If your super doesn't add up, contact your fund or the Australian Tax Office.
Bernie Dean is
