Super news for February 2020

Super funds stay safe in short-term volatility

Super funds may have kicked off the year well in January, but February is a different story according to leading research company SuperRatings.

Estimates show the median balanced option for super funds returned 1.9% in January, predominantly driven by gains from Australia and international shares. But by February, markets were affected by the Coronavirus outbreak, which saw selloff in global share markets with investors wanting to shore up assets.

Asian equity markets bore the brunt of the initial impact of the virus, but effects are still expected to be felt across the globe. As super funds face a new normal of lower returns and yields, managing volatility is becoming increasingly necessary.

SuperRatings Executive Director Kirby Rappell says funds and are not responding with knee-jerk reactions but remain focused on the long term. “They’re watching developments closely, but so far market volatility has been in line with similar risk events experienced in recent years,” he says, alluding to the 2018 Ebola outbreak and the SARS epidemic of 2003.

“Fund investment strategies are generally well placed to manage these types of movements,” Mr Rappell says. “Australian super funds have proved relatively resilient to short-term market movements.”

NAB hit with new class action

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