Super funds fell again in May, with the median growth fund (61% to 80% in growth assets) posting a 1% decline for the month, according to Chant West.

The research house said yields deteriorated after “minor setbacks” in April and May.

“Equity and bond markets suffered so much in the first half of June that, with less than two weeks of the year remaining, we estimate the median return for growth funds is now around -5% versus FY22 to date,” it said.

“However, given the magnitude of recent market swings, the end result could be materially different, either for the worse or for the better.”

Chant West’s senior director of investment research, Mano Mohankumar, said while growth funds were now almost certain to end the year in the red, members should resist taking drastic action.

“People need to see things in context. A negative result would be only the fifth in 30 years since the introduction of the super mandatory in 1992. And remember that this year’s result follows the excellent return of 18% in FY21, the second best of the history of super obligatory.

“And even in fiscal year 2020, which included the COVID-induced equity market crash, the loss was limited to just 0.6% on average. A number of funds actually generated positive returns that year, so for many members a negative result this year would be their first in 13 years.

He said fund members could also take comfort in the fact that, even after taking into account the large losses from June to date, the median growth fund was still 5% ahead of the pre-COVID high. end of January 2020.

“Most importantly, the funds continue to meet their long-term return objectives with a comfortable margin to spare.

“When markets fall sharply, as they have recently, some people tend to panic and think about moving money to less risky investment options, or cashing in, with a view to coming back later.

“But trying to time the markets is a risky proposition. Far more often than not, this results in a worse long-term outcome than if you just sit back and stay the course. Panicking only converts paper losses into real losses. Plus, you risk missing out when the markets rebound – as they will at some point. Even many members nearing retirement can afford to take a long view.