Aussies warned against making huge super mistake that could cost you big
Australia's biggest super fund is urging retirement savers to avoid panic switching to cash as Donald Trump 's tariffs cause share market turmoil.
The benchmark S&P/ASX200 peaked in February but dived by 14 per cent by early April as a series of broad-based import taxes on goods entering the US rattled financial markets.
But since then, the Australian market has soared by 16 per cent to test new peaks as Trump tried to de-escalate his trade war with China.
AustralianSuper's head of asset allocation Alistair Barker said switching super to cash, from growth-oriented assets like shares, was a bad idea during a time of share market volatility.
'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,' he said.
A large chunk of Australians think switching to cash or a lower-risk option during a downturn is a good idea, with 40 per cent of people backing that idea, a YouGov poll of 1,011 adults taken in June found.
AustralianSuper, Australia's biggest super fund with 3.5million members, commissioned the survey to illustrate the need to avoid panicking.
It found one in three baby boomers, born from 1946 to 1964, to be the most anxious, considering they are now all of retirement age and able to access their super.
A bear market typically occurs every two to three years, with global share markets diving by 20 per cent.
This included the onset of Covid in 2020 and the 2025 volatility sparked by the Trump tariffs.
'These fluctuations are to be expected, and over the long term, superannuation is built to weather these storms,' Mr Barker said.
AustralianSuper calculated that $100,000 invested in 2005 would now be worth $430,000 in 2025 in a balanced option which included exposure to shares.
During the past decade, an AustralianSuper fund with a balanced option has delivered average annual returns of 7.6 per cent.
Funds with greater exposure to Australian shares delivered returns of 9.3 per cent, while those with a bigger holding of international shares returned 10.5 per cent.
By comparison, funds with just cash returned a mere two per cent on average.
Separate SuperRatings data showed balanced retirement savings funds, with a 60 to 76 per cent orientation towards growth assets, delivered monthly returns of 2.6 per cent in May.
This followed a flat 0.6 per cent gain in April, despite the big slump in share markets.
The Australian share market was marginally firmer on Wednesday, with Moomoo market strategist Michael McCarthy noting investors were relieved that Donald Trump had ordered Israel to cease its bombing campaign of Iran.
A prolonged war in the Middle East had threatened to stop oil moving through the Strait of Hormuz, which had seen crude oil prices this week climb above $US70 a barrel.
'Shares rallied in overnight trading as investors moved up the risk spectrum on the prospect of a peaceful resolution of conflict in the Middle East,' he said.
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