Market volatility and how it affects your super


Markets around the world have experienced significant volatility as investors try to assess the impact of the coronavirus (COVID-19) outbreak. Learn what this means for you here.

Market volatility

Investment markets got off to a volatile start in 2022 as central banks consider rising historically low interest rates to combat inflationary pressures. And the tragic situation caused by Russia’s invasion of Ukraine, as well as the subsequent sanctions unleashed on Russia by global leaders, are also causing share market uncertainty.

History tells us that share markets settle down relatively quickly after similar conflicts, however with increasing inflation and rising rates on the cards, we expect markets to remain volatile for quite some time.

Just how much this impacts your super will depend on how much of your super is invested into growth assets such as shares and property. For example, if you’re invested in a high growth strategy, or are in a lifestage fund and not looking to retire any time soon, it’s likely you’ll have more of your super invested in growth style assets that are subject to bouts of short-term volatility.

If you’re invested in a lifestage fund and are closer to retiring, or have selected more defensive investment options, your exposure to the share market and any risks associated with it will be lower than a high growth strategy.

What this means for you

Our message at this time and during any market volatility is to stay calm and don’t panic.

Super is a long-term investment, so while investment markets can be unpredictable over the shorter term, they typically recover over the longer term. 

If you’re approaching or are in retirement, it’s still important to stay focused on your long-term investment strategy and consider all your options before making any significant changes.

You should keep the following things in mind when looking at your super and what’s happening in global markets:

  • Stay calm – Over time, the value of your super investment can fluctuate, depending on a range of factors, including market conditions. Reacting to short-term market conditions may mean you’re missing out on subsequent market improvements.

  • Di­ver­si­fi­ca­tion – Most members in super funds (including MySuper) are invested in a variety of asset classes, not just the share market. Different asset classes perform differently over time which helps to even out the highs and lows of market volatility in a particular asset class.

  • Long-term investing – Super is a long-term investment so many investment objectives focus on a 10-year period. It is expected that there will be periods of volatility, but over the longer term, markets generally recover from short-term movements.

  • Stick to your plan – Understand how much risk you’re comfortable taking when it comes to how your super is invested and build this into your financial plan. You should regularly review your financial plan to make sure it still reflects your current needs. For instance, if you’re moving towards retirement and your super is invested in a high-growth investment strategy, your level of risk may be too high.

  • Seek advice – If you need assistance with determining the level of risk you’re comfortable taking on, or if your financial plan is still meeting your needs, you may wish to consider seeking the advice of a qualified financial planner. With a well-formulated financial plan, you may be better placed to withstand periods of volatility.

Below, you’ll find some insights about the market and what is happening right now. This may help you learn about the impact it may have on your super. And remember, we are here to help if you have any other questions about your super – just call us on 132 135.

Common questions and answers

What does it mean for my super?

The value of your super can change daily depending on how your super is invested. The value and performance of each investment option is linked to the underlying asset classes (types of investments e.g. shares, property, fixed interest etc) it invests in and these fluctuate in line with the performance of these assets and the market.

As your super may be invested in the Australian and/or international share markets, you may have experienced a fall in your super balance.

What does it mean for my investments?

Depending on where your super is invested and whether it’s in a high growth strategy, your super is typically invested into one or more asset classes (typically Australian and international shares, property, bonds and cash). You may have experienced a fluctuation in your investment value which reflects the performance of the assets your super is invested in. Long-term growth assets such as shares and property tend to fluctuate and are more volatile in the short term, but over the long term generally produce higher returns than other asset classes.

What should I do?

Super is a long-term investment. Changing your investment option(s) as a reaction to short-term market fluctuations is an important decision and depends on a number of factors including your age, life stage and risk appetite. You should seek advice before changing your long-term investment strategy.

If you’re still accumulating super and not intending to retire for a number of years you might want to consider staying with your current investment strategy instead of trying to ‘time the market’. It’s important to remember that the performance of your super depends on your time in the market which can be disrupted if you try and ‘time the market’ e.g. by switching out of an investment option when its performance is falling and switching back in again when markets are rising. It’s difficult to pick the top and bottom of the market, but sticking to your strategy over the long term will likely mean you are better placed to capitalise on growth and minimise losses.

Alternatively, if you’re approaching, or are in, retirement it’s important to stay focused on your long-term investment strategy.

It’s also important to remember the importance of diversification (investing in different asset classes) when determining an appropriate investment strategy. Diversification helps to manage risk and soften the impact in the event of a significant market fall.

Next: Invest strategies for your super

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Things you should know

The information is prepared by BT Funds Management Limited ABN 63 002 916 458 (BTFM) the trustee of the following: BT Super for Life, BT Super for Life Westpac Group Plan and BT Super part of the superannuation fund Retirement Wrap ABN 39 827 542 991, and is current as at 4 February 2022.

This information has been prepared as general advice only and does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs before acting on it. Read the Product Disclosure Statement (PDS) to see if these products are right for you by visiting The issuers of the products named in this article can be found in the relevant disclosure documents. Read the disclosure documents for your selected product before deciding. Target Market Determinations for our products can be found here. Past performance is not a reliable indication of future performance. All examples are illustrative only. Your portfolio value and performance will depend on the investment options you have selected and the time over which they are invested. 

Investment returns are historical. Investment returns can move up or down and past performance is not necessarily indicative of future performance. Future performance is not guaranteed. Performance differences between the investment options and respective underlying funds exist due to factors such as valuation timing differences, differences in fees and charges, distributions (as cash may be retained for liquidity purposes) and higher cash holdings. More information on the asset allocation and risk exposures of each fund can be found in the PDS.

BTFM is a member of the Westpac Banking Corporation ABN 33 007 457 141 (Westpac) group of companies. An investment in these products is not an investment in, deposit with or any other liability of Westpac, any division of Westpac or any other company in the Westpac Group. Westpac and its related entities do not stand behind or otherwise guarantee the capital value or investment performance of the products or any related assets of the products.