Modest growth: Super funds weather Trump tariff storm in April

In spite of ongoing volatility in financial markets, returns from superannuation funds generally edged higher over the course of April - clawing back some of the losses suffered in the previous month.

New research from Chant West reveals that typical diversified super funds across all risk profiles ended April above water, with the median growth option (in which 61% to 80% of funds are allocated towards growth assets) up 0.6% over the month.

Fellow research firm SuperRatings posted similar findings, estimating that the median balanced super option returned 0.6% during April.

The news will come as a relief to many superannuation members who watched their retirement funds dip sharply in March on the back of market volatility spurred on by tariff policies out of the United States.

The market jitters continued in early April following US President Donald Trump's 'Liberation Day' tariff announcement, but as Chant West senior investment research manager Mano Mohankumar explains, the situation improved as the month progressed.

"The higher-than and broader-than expected tariff announcements made by Trump early in the month sparked extreme market volatility, with Australian shares and hedged international shares down 6.5% and 10.2% respectively over the first week of April.

"However, his subsequent pause on tariffs on most countries resulted in a strong market rally, which has continued into May so far."

Over April as a whole, Mohankumar notes that hedged international shares did end the month 1.8% lower while unhedged international shares were 0.4% lower.

However, a strong performance from Australian shares (up 3.6%), as well as Australian and international bonds - which returned 1.7% and 0.9% respectively over the same period - helped drive the modest growth in super returns.

Mohankumar also says that the recent rebound may have vindicated superannuation members who didn't rush to alter their risk allocation.

"If you panicked in early April and switched to a lower risk option or cash, not only would you have crystalised your losses, you would have also missed out on the market rebound.

"That's why we remind members that super is a long-term investment and encourage them to see a financial adviser if they're thinking of switching options."

While the last few months have proven to be a difficult period for many asset classes and, as a result, superannuation balances, Chant West highlights that, over the longer term, the picture has been brighter.

In the 12 months to the end of April Chant West's analysis shows that the median 'balanced' super option has recorded a 6.8% return, the median 'growth' option a 7.7% return and the median 'high growth' option an 8.8% return.

For more information on how individual superannuation funds have performed over time, head on over to Money's superannuation performance comparison tables.

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