Superannuation sector analysts project losses of up to 10 per cent after a wild 12 months of inflation-fuelled panic across financial markets.
Australians are bracing for losses in their retirement funds for only the fifth time since compulsory superannuation came into force in 1992, as analysts project returns to fall by up to 10 per cent after a wild year of inflation-fuelled panic across financial markets.
“It looks like a negative year, unless something miraculous happens,” Chant West senior research manager Mano Mohankumar toldSuperRatings executive director Kirby Rappell said the sector enjoyed a 4.4 per cent positive return in the first half of the year before volatility picked up alongside surging inflation, leading to a 7 per cent fall in the past six months.
UniSuper chief investment officer John Pearce said the period showed even the biggest and most experienced institutional investors had not been immune from the inflation-fuelled havoc in markets – which has taken a toll not only on equities but also traditional defensive assets such as bonds.
“This period has shown us that we need to make this transition to renewables and need to make it fast, but we can’t do it at the expense of energy security in the short term,” he said.Chant West’s Mr Mohankumar agreed that many ESG-themed funds would have struggled, but added there is a wide range of investment strategies that adopt that label or related terms like “sustainable” and “ethical”.
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