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1 in 5 Aussies switch their investments amid sharemarket volatility

Switches and Australian money notes.
Aussies have switched their superannuation investments this year, but it can be risky. (Source: Getty)

Global financial markets have been volatile recently and your superannuation may have taken a hit. If you’re worried about your super balance, it seems you’re not alone.

New research reveals that one in five Aussies (19 per cent) have switched their super investment risk profile in the last six months.

One in 10 Aussies (11 per cent) have switched to a more conservative investment option (i.e. more cash) to safeguard their nest egg, according to the survey by Finder.

Meanwhile, 8 per cent of Aussies opted to change to a more aggressive option (i.e. more shares), the nationally representative survey of 722 people found.

Finder superannuation expert, Alison Banney, said while the current volatile market conditions can be troubling, it’s important to remember that super is a long-term investment.

“These downturns don't last forever – share markets have always recovered and gone up over the long term,” Banney said.

"If you switch your super to a more conservative option after the market has already fallen, not only are you locking in that loss, but you also risk missing out on the rebound when the market recovers.”

Long-term returns

Interestingly, recent data from Chant West found that more aggressive funds performed better than conservative funds over August.

Conservative funds lost 0.6 per cent on average in the month ending August 2022, while all growth funds lost 0.3 per cent on average.

Looking at longer-term returns, Chant West found all growth funds returned 8.2 per cent on average over five years, while conservative funds returned 3.6 per cent over the same period.

“Despite the challenging backdrop over the past two and a half years, the median growth fund is more than 10 per cent ahead of the pre-COVID high that was reached at the end of January 2020,” Chant West Senior Investment Research Manager, Mano Mohankumar, said.

“This should be comforting for fund members. More importantly, funds are continuing to meet their long-term return and risk objectives.”

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