The current situation in the Middle East is deeply concerning for those impacted. Investment markets have seen increased volatility, driven by concerns around geopolitical instability, oil prices and supply chain disruptions. The potential outcomes for investment markets will be influenced by the duration of the conflict and its impact on global supply chains.
From an investment perspective, we recognise it can be difficult to focus on the long term when there is market volatility. Events like these can have a negative impact on investment market returns, which may affect member balances. However, market volatility is a normal part of investing when saving for retirement. We prepare for situations like these and remain focused on the longer-term return potential of the assets in the portfolio, which are based on the underlying cash flows and earnings.
Our investment team continues to monitor this conflict, along with economic and market conditions, to invest for members over the long term. Our size, scale and strong cash inflows mean we can continue to invest through market ups and downs. As an active investment manager, we continue to adapt to changing conditions, managing risk and investing in attractive opportunities to grow members’ super. We continue to see pockets of volatility, which can lead to the mispricing of assets and buying opportunities for long-term investors like us.
We’ve learned from past events, like the COVID-19 downturn in March 2020 and Liberation Day last April, that market volatility can happen quickly and with little notice. As such, we have sufficient liquidity and reserves to fund payments to members and invest in new opportunities as they arise.
Navigating market volatility
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Show Transcript
With all the market volatility, why aren’t I better off switching to cash?
Well, you could do that. But if you look through history, what matters is time in the markets, not timing the markets. And really, what that saying is referring to is that being invested over the long term is the best way to compound your wealth.
Trying to identify turning points in markets is notoriously difficult. But, in particular, what we’ve noticed when we look through historical events and historical behaviour is that people often might make a decision to move into cash or something secure when things are difficult. But, the very important thing is, if you were to make that decision, you then have to make a second decision as to when to get back in. Because staying in cash for the longer term doesn't necessarily keep pace with inflation.
So, time in the markets matters more than timing the markets, partly because you don’t have to make one decision, you’ve actually got to make two.
End Transcript
Frequently asked questions
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What is happening in investment markets?
Global markets are experiencing more volatility, largely due to geopolitical developments. Market ups and downs are a normal part of investing and volatility is more noticeable in the short term. That’s why it’s important to look beyond the short term. Even members in or approaching retirement can still be invested for another 20 or more years.
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What is AustralianSuper doing to manage this?
As a long-term investor, we review and adjust the portfolio in response to the changing economic and market outlook and actively seek opportunities to deliver value for members.
Our investment teams are monitoring ongoing developments and assessing the potential impacts on asset markets and how to best position the portfolio to deliver long-term performance.
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Should I make changes to how my superannuation is invested?
It’s important to remember that your super is a long-term investment, even for most people in retirement. While changes in your balance can be worrying, market fluctuations are normal (as we can see from the impact of market cycles on asset classes) and that’s why keeping a long-term focus is important.
If you make decisions based on short-term considerations, you could end up worse off in the long run. This includes activities like switching investment options which can have a significant impact on how much super you’ll have when you retire.
When it comes to investing through super, you have choices, our risk profiler may help you to work out the type of investor you are, so you can be better guided when making investment decisions.
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How has the Balanced option (Super) performed over the long term?
This chart shows the growth of $100,000 invested in the Balanced option over 20 years to 31 December 2025. Over this time, without any additional contributions, $100,000 has grown to $408,000 – despite market ups and downs.
Growth of $100,000 invested in Balanced option (Super) from 31 December 2005 to 31 December 2025.
AustralianSuper investment returns are based on crediting rates, which are returns less investment fees and costs, transaction costs, the percentage-based administration fee deducted from returns from 1 April 2020 to 2 September 2022 and taxes. The analysis is net of administration fees with ending balance results rounded to the nearest $1,000. Returns don’t include insurance and other fees and costs that are deducted from account balances. Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns. Returns from equivalent options of the ARF and STA super funds are used in calculating return for periods that begin before 1 July 2006.
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How has the Balanced option (Choice Income) performed over the long term?
This chart shows the growth of $100,000 invested in the Balanced option for Choice Income, from 30 June 2008 to 30 June 2025. Over this time, without any additional contributions, $100,000 has grown to $146,000 – despite market ups and downs and $112,000 in total drawdowns.
Growth of $100,000 invested in Balanced option (Choice Income) from 30 June 2008 to 30 June 2025
Assumptions: Starting age: 65; Drawdowns: Starts at 5% of the year-end balance and increases with age, based on current minimum drawdown rates. AustralianSuper investment returns are based on crediting rates, which are returns less administration and investment fees and costs, transaction costs and taxes. Doesn’t include other fees and costs that are deducted from account balances. The analysis is net of administration fees with drawdowns and ending balance results rounded to the nearest $1,000. Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns. Minimum drawdown rates available from the ATO:ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/payments-from-super
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What is a bear market?
When share market values are falling over a prolonged period of time, it’s known as a bear market. They are often associated with major economic downturns, like the Great Depression in the 1930s and the Global Financial Crisis in 2008/09. The technical definition of a bear market is when asset prices have fallen by more than 20% from their recent highs.
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What may happen to your super in a bear market?
If share prices are falling, your super may experience a fall in value too. In that scenario, some members might think that moving from a diversified investment option such as AustralianSuper’s Balanced option to a cash option would avoid further falls. If you’re thinking of switching, it's important to understand the risks and check before you switch, and also to consider your financial advice options1.
1 Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Fees may apply.
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What is a bull market?
A bull market is when investor confidence is strong, and prices are rising faster than average over a consistent period. Bull Markets typically (although don’t always) coincide with periods of strong economic growth, and investors are attracted to the potential of higher returns.
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What may happen to your super in a bull market?
During a bull market, the share market value is rising, and your super may grow too. During a rising share market, you may be considering if what you’re invested in is right for you. To find out more about the right investment option for your specific needs, visit Choosing the right super option. With changing conditions, it’s worth understanding the risks of switching over the short term. It’s good to understand that super is a long-term investment to help you reach your best retirement outcome.
Our Balanced investment option is designed to have medium to long-term growth with possible short-term fluctuations. It is recommended that this option has a minimum investment timeframe of at least 10 years.
