Important: Superannuation is a long-term investment. Don’t be too concerned about a negative month here or there because on average super funds have been providing positive returns for 28 of the last 33 years.
Despite rising Middle East tensions, super funds continued to deliver strong returns in February, with the median Growth fund (61% to 80% growth assets) up 1.1% over the month and 6.5% for the year to February 28.
However, as war with Iran escalated and the disruption to oil supplies pushed global oil prices and inflation higher, markets buckled. Chant West estimates the median Growth fund is down 3.8% in March so far, reducing the return for the financial year to date to about 2.5%.
Chant West head of superannuation investment research, Mano Mohankumar urges people to remember that super is a long-term investment and that periods of short-term market weakness are inevitable along the way.
He also cautions people against knee-jerk reactions such as switching to lower-risk options or cash. “More often than not, that approach results in poorer long-term outcomes than if they stay the course. Not only do they crystallise their losses, but also risk missing part or all of the subsequent market rebound.”
While market falls are particularly uncomfortable for super members who are close to retirement, Mohankumar points out that many older Australians are likely to have money in the pension phase of super for 20 years or more, so their investment horizon is longer than they might think.
To put the current market fall in context, it’s important to remember that super funds have delivered strong returns for the previous three financial years, up 9.2% in 2023, 9.1% in 2024, and 10.4% in 2025. “Returns at those levels shouldn’t be expected every year, but importantly, super funds continue to deliver on their longer-term return and risk objectives,” says Mohankumar.
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