Global markets have been pummelled, hurting those who have their retirement savings heavily invested in shares. Here’s what you need to do next.
Global markets have been pummelled, hurting those who have their retirement savings heavily invested in shares. Here’s what you need to do next.

Super fund members urged to keep calm

Super fund accounts have taken a battering in recent weeks amid the deadly coronavirus outbreak, delivering negative returns of 6.5 per cent.

This means on $100,000 in super a member's balance would have fallen to just $93,500 since the beginning of February.

Despite this new analysis by super research firm Chant West showed for the financial year-to-date returns are flat, despite a tumultuous February and March.

The ASX200 fell 3.6 per cent on Wednesday and has decreased by 20.1 per cent since February 20 which has $430 billion ripped from the value of the nation's top 200 companies.

 

Global markets have been pummelled, hurting those who have their retirement savings heavily invested in shares.

And funds have reported an increase in members in recent weeks contacting their funds to massage their investment options and move away shares, instead opting for a conservative option.

Chant West's research manager Mano Mohankumar urged people not to panic because "super's a long-term investment".

"You don't want to get distracted by short-term noise and we caution members who try and time the market," he said.

HostPlus's chief investment officer Kristian Fok said for those opting to keep their super invested in the safer option of cash, "it will not keep up with your living standards".

Many returns on cash savings account are less than 1 per cent.

"We have seen more people moving away from growth options to conservative options," Mr Fok said.

People have been urged not to panic because “super’s a long-term investment”.
People have been urged not to panic because “super’s a long-term investment”.

He said 80 per cent of their 800,000 members are invested in growth assets and there's been a zero per cent return on their growth option so far this financial return.

Figures from Industry Super Australian showed savers who moved the average balance industry fund into cash during the Global Financial Crisis were left $4000 worse after three months, $13,800 over a year and $34,800 after five years.

ISA chief executive Bernie Dean warned, "A way to lose money in super after a downturn is to make changes that crystallise your loses".

"People avoid selling their house during a property market slump because they are worried about making a loss, the same principle should be applied to changing your super fund or investment option immediately after a market drop."

While one of the nation's largest super funds, AustralianSuper's chief investment officer Mark Delaney urged members think carefully before changing how their retirement money is invested.

"When people see their super balance fluctuate it can tempt them to change investment options," he said.

"If you're investing for the long term you're going to have events like the one we are experiencing now but the long-term smooths things out."

AustralianSuper has more than 2.1 million members and $180 billion of funds under management.

sophie.elsworth@news.com.au

@sophieelsworth


Future is digital: News announces major changes

Future is digital: News announces major changes

Many of News publications will stop printing but digital to soar

‘Good ol’ mate’: Tributes flow for voice of Noosa Show

premium_icon ‘Good ol’ mate’: Tributes flow for voice of Noosa Show

‘It will be very hard to get someone who could entertain a crowd like Alain...

Call for SLSQ to explain its position

premium_icon Call for SLSQ to explain its position

Noosa community deserves some answers from Surf Life Saving Queensland after a...