From bull runs to bubble talk and AI hype: where does your super fit in?

If you haven’t looked at your super balance in a while, now might be a good time to peek. Your superannuation likely went up again in August, with research from SuperRatings showing the average balanced option rising about 1.3% and the average growth option 1.5%.

This follows a similarly positive July and a strong financial year overall, where balanced funds grew 10.1% and growth funds 11.3%.

So, what’s behind all the good news?

The good news for super explained

The reason super has been doing so well is pretty simple: the US stock market has been on a tear, and a big chunk of most peoples’ super is invested in Australian and overseas stocks like those in the US.

Specifically, a handful of huge tech companies involved with artificial intelligence (AI) have seen their stock prices go through the roof. Because these companies are so massive, they have a huge effect on the entire market, pulling most of our super funds up with them.

Of course, having so much of the good news tied to just a few big names has people nervous. It's led to some rumblings of an AI ‘bubble’, and the worry is that the same stocks pulling the market up could also pull it back down. 

It’s a reminder that markets are sensitive to big news; we saw that earlier this year when the uncertainty around US trade tariffs caused a dip back in February.

So, should you do anything differently with your super?

Bull runs, bear markets, bubble talk… the headlines can make it seem like it’s time to act. But should you make any split second decisions based on the headlines? In most cases, the answer is no.

Let’s put the newspaper down for a moment and think about it a little differently. There’s an old saying worth remembering:

‘It’s not about timing the market, it’s about time in the market.’

What this means is that you benefit over time from not only the ups, but also the downs. When things are hot, your balance grows. 

But the dips can also help in their own weird way. Yes, your overall balance will go down, but your continuing super contributions will start buying assets like shares at a discount - so you’ll end up having more of them during the next upswing. 

How you should think about your super instead

Rather than reacting to headlines, the more useful step is to work out where you are on your super journey. This isn’t about something you do because of today’s headlines, it’s something worth checking at any time. If you haven’t done it yet, now is as good a moment as any.

There are two stages most people move through with super, and they call for different approaches.

The accumulation phase

This is the long stretch while you’re working and adding to your balance. If you’ve still got 20 or 30 years before retirement, time is on your side. A growth or high growth investment option is generally the type of setting designed to take advantage of the ups and downs of the share market. 

The strong runs grow your balance, and when dips arrive, your contributions buy more units at lower prices, so you’re holding more by the time markets climb again.

The preservation phase

This is when retirement is getting closer. A strong run can make it tempting to stay in a high growth option and enjoy the gains. But the risk is what could happen next. If a big downturn hits, you might not have enough time to wait for the recovery. 

That’s why many people in this phase move into a more conservative or balanced option that shifts more of your balance into less risky investments like cash and government bonds. You give up some of the upside during hot share markets, but you’re also less likely to see a large part of your savings disappear right before you need them.

Bottom line

Super’s on a good run, and it’s nice to see balances rising. Just remember, the way to think about your fund isn’t through today’s headlines but through your own timeline.

It’s also important to remember that past performance isn’t a reliable indicator of future performance, and that everyone’s journey is different. If you’re not sure which option fits your stage of life, it’s worth talking it through with a licensed financial adviser.

And if your current super isn’t a good match for where you’re going, why not check out some of these attractive options.

Aware super disclaimers:

^SuperRatings Fund Crediting Rate Survey, March 2025. Based on SR50 Growth (77-90) Index. Returns are after tax and investment management expenses but before the deduction of administration fees. Past performance is not an indicator of future performance.

^^Chant West Super Fund Fee Survey December 2024, High Growth [81-95% in growth assets] investment option index and $50,000 account balance. Fees and costs can vary from year to year. Past fees and costs are not a reliable indicator of future fees and costs. Fees and comparisons may differ for other investment options and account balances. Aware Super’s High Growth option as published in the Aware Super Future Saver PDS.

Superhero disclaimers:

#Low Fees - Findings based on Superhero’s analysis of SuperRatings’ Fee Report - October 2024, accessed 5 December 2024. Fees for Superhero Super’s Growth and High Growth investment options are in the top quartile based on Total Fees and compared against the SR50 Balanced (60-76) and SR50 High Growth (91-100) Indices respectively. Performance - Findings based on Superhero’s analysis of SuperRatings’ Fund Crediting Rate Survey – October 2024, accessed 5 December 2024. Based on Superhero Super’s Growth and High Growth options being in the top quartile for one year return across the SR50 Balanced (60-76) and SR50 High Growth (91-100) Indices respectively. Refer to the Superhero Super PDS and TMD for found at superhero.com.au/support/documents for more information.

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