Understanding Market Volatility


As you may be aware, local and international markets are being impacted by a range of economic and geopolitical issues including the Russia/Ukraine conflict, impacts on supply chains and commodity prices, and rising inflation.

Consequently, Australia is experiencing challenging financial market conditions, which has led to a drop in superannuation balances nationwide.

While drops in performance are uncomfortable, it’s important to remember that super is a long-term investment, and ups and downs are a normal part of investing.

But we understand that everyone’s situation is different, so if you have questions about your super, we’re here to help. Contact our Advice Team.

A message from our Chief Investment Officer

Frequently Asked Questions

  • What is volatility?

    Volatility is a measure of potential uncertainty or risk associated with a market’s future performance, which can alter its value.

    Risk can be created or increased through external triggers or events such as economic instability, supply and demand, international trade tensions and more recently a global pandemic.

  • How does volatility affect my super?

    The job of a super fund is to increase its members’ retirement savings through investing in different vehicles. Different investments have different levels of risk and exposure to volatility.

    Higher risk/return investment options generally invest more in shares, infrastructure and property, while lower risk/return options invest more in cash and fixed-interest investments.

    Members with super allocated to higher risk options will generally see larger swings in their returns as they have greater exposure to market movements.

  • How can I manage volatility and my super?

    One way to help ease volatility concerns is to diversify your portfolio across different asset classes which can help soften the impact of an unexpected market fall.

    Cbus offers members a choice of Pre-mixed investment options that range from a high allocation to shares along with property and infrastructure, through to options that have higher allocations to cash and fixed-interest. We also offer DIY options that allow you to mix and match and create a portfolio that suits your level of risk and reward. Our default investment option for super members is the Growth (MySuper) option that invests around 70% in assets like shares, property and infrastructure. Members invested in the Growth (MySuper) option may see their account value moving up and down if there are big falls and rises in share markets.

    For retired members our default Conservative Growth option invests around 50% in assets like shares, property and infrastructure. Members in this option would still see some movement in their account balance if there are big falls and rises in share markets.

    Super is a long-term investment, so it’s important not to react to short-term market ups and downs.

Read our volatility fact sheet

A fact sheet that details current market volatility and how it could impact your super.