Australian pensions suffer worst month since 2022 on Iran War
While shares have rebounded in April, markets were back on edge by Apr 9
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[MELBOURNE] Australia’s pension funds have endured their worst monthly losses in more than three years as the war in Iran triggered market swings that battered some of their biggest investments.
A broad sample of investment options – where most Australians hold their retirement savings – posted an average loss of 3.2 per cent for March, according to estimates provided to Bloomberg by research house Chant West. That’s the worst return since September 2022 and largely driven by the industry’s massive exposure to stocks.
Funds in Australia’s A$4.5 trillion (S$4 trillion) pension industry hold more than half of their portfolios in equities, with around 30 per cent in global shares. That left them exposed as markets tumbled in March: Australia’s benchmark index fell almost 8 per cent, while the S&P 500 dropped about 5 per cent, as the Middle East conflict, oil price shock and renewed jitters around a local rate hike rattled investors.
While shares have rebounded in April, surging on Wednesday (Apr 8) after the US and Iran agreed to a two-week ceasefire, markets were back on edge by Thursday as Iran said that the truce was violated and oil prices climbed.
The ongoing volatility prompted many Australians to switch investment strategies within their superannuation funds amid fears for their retirement balances, according to A$100 billion fund Hesta. Some have moved out of typical balanced portfolios into more defensive options such as cash and term deposits, leading the fund to warn against knee-jerk reactions.
“History shows staying invested through market ups and downs typically delivers stronger long-term returns for our members,” Hesta CEO Debby Blakey said on Tuesday.
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Australia’s pensions returned almost 9 per cent for their main balanced option in 2025 despite a turbulent year in markets, according to research house SuperRatings. BLOOMBERG
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