Super funds thrive amid market challenges

Tree protected from a storm by a white cloud

A share rally in the final quarter of the 2023 calendar year helped propel Australian superannuation funds to notable year-end gains, with the median Balanced and Growth options delivering impressive returns of 9.6% and 11.0%, respectively. 

This remarkable recovery followed a challenging year in 2022, marked by fluctuating market conditions and a -4.8% loss for many funds. 

Line chart showing the growth of a $100,000 investment since January 2014 across various investment indices.

Image source: SuperRatings

According to superannuation research house SuperRatings, 2023’s strong results can be attributed to two major factors:

  • Tech sector surge. The international technology sector experienced substantial growth, highlighting the importance of diversification within fund portfolios.
  • Strategic cash management. Funds optimised their portfolios to take advantage of rising cash rates, particularly in fixed interest and cash investments.

SuperRatings executive director Kirby Rappell suggested that many Aussies will be pleased with these results, but he also emphasised the need for diligence in managing superannuation investments. “As we look ahead to what 2024 might bring for super fund returns, ongoing uncertainty means it remains important to set a strategy and stick with it despite the potential for periods of falling balances,” Rappell said.

It’s also worth noting that past performance is not a reliable indicator of future performance.

Tips for Maximising Your Superannuation Investments in 2024

With Rappell's guidance in mind, let's explore some effective ways to navigate your superannuation investments in 2024. A proactive approach can make a significant difference in maximising your fund's potential, especially in a market that continues to present challenges.

  • Periodic portfolio review. Ensure your investments align with your retirement goals and comfort with risk. Adjusting your portfolio periodically can help you stay on course with your financial objectives.
  • Stay economically informed. Knowledge is power in the world of investing. Keeping tabs on general economic trends helps you understand the broader context of your superannuation performance.
  • Diversify your investments. A well-rounded investment strategy, spreading across different types of assets, can balance risk and potential growth.
  • Consider voluntary contributions. Depending on your financial situation, extra contributions to your super can be a beneficial way to build your retirement savings.
  • Seek expert guidance. A financial advisor can provide personalised advice, helping you navigate your investment choices and plan for the future.

Superannuation is an important part of planning for the future, and being informed can help you navigate your options more confidently. To delve deeper into the world of superannuation and access valuable resources, we invite you to explore our superannuation guides hub.