Association of Superannuation Funds of Australia CEO urges calm as Aware Super says it will buy the market dip

A peak body for Australia’s $4 trillion superannuation industry has urged 18 million people not to panic as the average super account with $300,000 parked in it sees about $20,000 wiped out within days. Mary Delahunty, the Association of Superannuation Funds of Australia’s chief executive, said super funds are “well placed” to weather the share market bloodbath. “ASFA can’t give financial advice, but suggests Australians shouldn’t panic about the current fluctuations in Australian and US share markets, especially as the falls follow recent all-time highs,” she said. “Superannuation funds have well diversified portfolios, including holdings of cash, government bonds, private debt, listed and unlisted infrastructure and property, and hedge funds. “While there can be dips in investment returns in the short or medium term, our research shows funds on average return 7.5 per cent a year over a 25-plus year investment, which is around 5 per cent higher than average inflation.” Ms Delahunty’s call for calm comes as Aware Super — Australia’s third largest super fund — also on Monday said it plans to use the share market dip as a buying opportunity. “History shows us that markets go through periods of volatility like this every few years, and these represent a buying opportunity,” Aware’s head of investment strategy Michael Winchester told The West Australian. “Investing when shares have sold off is like shopping when the sales are on — you get more for your money.” But Mr Winchester added he would like to see a “few days” pass before making any major investments. The industry’s defiant stance may offer little solace to many of the 18 million-plus Australians with super accounts who have watched their paper wealth dwindle. The West Australian’s financial planning expert Nick Bruining estimates the average super balance would have bled more than 5 per cent since Wednesday. “Most people go with the default option, which usually has a 60 per cent exposure to growth assets like stocks and property. If we then go with the average of about 50 per cent of that being tied up in stocks then the decline would be 6 to 7 per cent,” he said. That means someone with $300,000 of super has suffered paper losses of between $18,000 to $21,000. “It’s not catastrophic, but definitely worrying for someone about to retire,” Mr Bruining said. He has a simple piece of advice for those stressed about their super balance. “Don’t look at your super, it will come back, the big question is when. No one actually knows the answer to that, except maybe Donald Trump.”