‘End of a 13-year boom’: Australia’s largest super fund posts fall for first time since GFC

“We’re starting with the end of a 13-year boom really. Unemployment is very low, inflation is very high, interest rates are rising. Exactly the opposite to what it was like in 2009. That’s why I think returns will be lower because the conditions in place for the last 10 years, the starting conditions, they are now in the opposite points, so it’ll just be harder,” said Delaney.

“It’s not clear that this is the end of the difficult times. And often these difficult times go on for longer than you hope … I think it could run on for a bit longer and we just need to buckle down, but don’t assume it’s going to run off forever.”

Investor concerns about runaway inflation and higher interest rates have smashed tech company valuations this year, with sharp a sell-off in listed tech stocks. However, Delaney said he would still consider investing in tech.

“Paradoxically, the cheaper they get, the more interested I am,” he said. “You want to be putting money in when things are grim. Not when things are good.”

Other super funds are expected to release their returns in coming weeks, with similar results expected across the board given rising interest rates, inflation fears and worsening consumer confidence.

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Chant House senior investment research manager Mano Mohankumar said their research estimated the median return for growth options would be between -3.5 to -4 per cent.

He said that much of the loss for the year was attributable to the month of June, 2022.

“If you looked at the 11 months through to the end of May, the median growth fund was actually positive.”

He said super funds in the long term had delivered on their objectives, and members should focus on these results rather than short-term figures.

“It represents a negative return but its important that super fund members see things in context. It only represents the fifth negative year in the 30 years of compulsory super,” he said.

“It’s important to see things in context and remember super is a long-term investment. We have been through a challenging year and there are some challenges ahead but being distracted by short-term noise can really hurt your long-term investment outcomes.”

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