Superannuation in volatile markets

Global markets are experiencing more volatility, largely due to geopolitical developments. This is mostly centred in the US where the new Trump administration has begun implementing trade policies. We understand it can be unsettling to see your balance fall. Market ups and downs are a normal part of investing and volatility is more noticeable in the short term. That’s why it’s important to look beyond the short term. Even members in or approaching retirement can still be invested for another 20 or more years.

As a long-term investor, we review and adjust the portfolio in response to the changing economic and market outlook and actively seek opportunities to deliver value for members.

Our investment teams are monitoring ongoing developments of trade policies and assessing the potential impacts on asset markets and how to best position the portfolio to deliver long-term performance.

It’s important to remember that your super is a long-term investment, even for most people in retirement. While changes in your balance can be worrying, market fluctuations are normal (as we can see from the impact of market cycles on asset classes) and that’s why keeping a long-term focus is important.

If you make decisions based on short-term considerations, you could end up worse off in the long run. This includes activities like switching investment options which can have a significant impact on how much super you’ll have when you retire.

When it comes to investing through super, you have choices, our risk profiler may help you to work out the type of investor you are, so you can be better guided when making investment decisions.

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When share market values are falling over a prolonged period of time, it’s known as a bear market. They are often associated with major economic downturns, like the Great Depression in the 1930s and the Global Financial Crisis in 2008/09. The technical definition of a bear market is when asset prices have fallen by more than 20% from their recent highs.

If share prices are falling, your super may experience a fall in value too. In that scenario, some members might think that moving from a diversified investment option such as AustralianSuper’s Balanced option to a cash option would avoid further falls. If you’re thinking of switching, it's important to understand the risks and check before you switch, and also to consider your financial advice options¹.

¹ Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Fees may apply.

A bull market is when investor confidence is strong, and prices are rising faster than average over a consistent period. Bull Markets typically (although don’t always) coincide with periods of strong economic growth, and investors are attracted to the potential of higher returns.

During a bull market, the share market value is rising, and your super may grow too. During a rising share market, you may be considering if what you’re invested in is right for you. To find out more about the right investment option for your specific needs, visit Choosing the right super option. With changing conditions, it’s worth understanding the risks of switching over the short term. It’s good to understand that super is a long-term investment to help you reach your best retirement outcome.

Our Balanced investment option is designed to have medium to long-term growth with possible short-term fluctuations. It is recommended that this option has a minimum investment timeframe of at least 10 years.