Weathering the storm: why super is built to endure market volatility

• 38 per cent of Australians feel fearful, confused or anxious about their superannuation during periods of market volatility.
• Almost half (45 per cent) say they would stay invested if markets dropped significantly, reflecting growing awareness of super’s long-term nature.
• However, 40 per cent believe switching to cash or a lower-risk option during a downturn and reinvesting once markets recover is a better approach, despite the risk of missing out on the market’s strongest rebound days during the recovery and locking in adverse long-term outcomes.
• AustralianSuper is encouraging Australians to focus on time in the market, not timing the market, to support stronger long-term retirement outcomes.

MEDIA RELEASE

25 June 2025 – Market volatility leads almost two in five (38 per cent) Australians to experience fear, confusion and anxiety about their superannuation, but AustralianSuper data shows those who stick with their investments are more likely to get better financial results.

New research from AustralianSuper reveals this emotional strain is impacting all Australians, no matter their age, with 22 per cent of those aged 25-34 reporting confusion about their super during periods of market volatility, and one third of Baby Boomers (33 per cent) saying they feel anxious at those points.

AustralianSuper’s Head of Asset Allocation, Alistair Barker, said this anxiety can lead people to feel like they should switch their superannuation investments into cash or other defensive assets, but the history of market cycles shows those who did so often missed out on the recoveries.

"While it’s tempting to make changes when markets fall, history shows that those who stay the course tend to see stronger long-term results.

“Our research shows 40 per cent of people believe it’s better to switch their super to cash or lower-risk options during periods of market volatility and then reinvest when markets recover. But this strategy could result in missing the market’s strongest rebound days and significantly reduce long-term growth.

Someone who switched to cash as the market dropped in early April this year would have missed out on the strong recovery in later in April and May,” he said.

Mr Barker says market fluctuations are a natural part of investing and urges Australians to focus on the bigger picture.

While market volatility has felt unprecedented this year, it's a normal part of the investment cycle. On average, history suggests we could expect to see a bear market - or a downturn in excess of 20% - occur every 2-3 years. To put that into context, global share markets fell as much as 20% between February and April 2025. In April and May, we saw a rapid recovery, re-emphasising the benefits of staying the course and maintaining a longer-term view.

It's also important to consider the benefits of a diversified portfolio. While listed share markets were heavily impacted during the recent sell-off, AustralianSuper's Balanced investment option offered downside protection, with investments across multiple markets and asset classes cushioning the impact for members.

“These fluctuations are to be expected, and over the long term, superannuation is built to weather these storms.

“AustralianSuper’s long term performance data reinforces this: a $100,000 investment over 20 years in the fund’s Balanced option on 31 March 2005 would have grown to over $430,000 by 2025, despite navigating global crises like the Global Financial Crisis and the COVID-19 pandemic¹.

“We’re encouraging our members to focus on time in the market, not timing the market. While it’s tempting to make changes when markets fall, history shows that those who stay the course tend to see stronger longer-term results.”

To learn more about long-term investing, visit: Switching Investment Options - Know the Risks | AustralianSuper