Trump has caused wild swings in your super, so how are things right now?

Retirement nest eggs have largely recovered from the hit inflicted by Donald Trump-induced market volatility as typical superannuation totals return to where they were before the US president’s inauguration.

However, experts have warned there is likely to be more volatility ahead for super fund investors, given the high level of uncertainty over the US president’s plans and what they may do to the world economy.

Donald Trump’s trade policies sparked market volatility in April, but super funds are on track for a reasonable year.Credit: AP

Australian superannuation funds were hit hard by the global market mayhem of early April, losing 4.5 per cent in about a week after Trump spooked investors by unveiling sweeping tariffs.

A market rally since has helped to bolster returns from the typical super fund, latest figures from SuperRatings reveal. The research house says most super fund members are on track to make returns of about 6 per cent this financial year, which is close to the long-run objective of many funds.

SuperRatings figures show that despite dramatic swings on markets early in April, when Trump announced the “Liberation Day” tariffs, the median balanced option super fund ended up returning 0.6 per cent for members in May. The median balanced fund has posted returns of 6 per cent over the financial year to date.

SuperRatings executive director Kirby Rappell said returns from super funds had been volatile of late but switching funds in response to the market turmoil last month could have cost members money.

“We saw a strong response from markets to the announcement of tariffs by the US early in the month, which resulted in superannuation returns bouncing around much more than usual,” he said.

“Importantly, the large declines seen at the beginning of the month were quickly regained as tariffs were paused, reinforcing the difficulty of timing the market.

“Members that panicked and switched options or withdrew funds may have missed out on this rebound, and we continue to encourage a long-term mindset around superannuation. We believe members are going to need to learn to live with volatility for the next period.”

AMP chief economist Shane Oliver said the sharemarket’s performance was a critical influence on super fund returns and that markets had recovered over April. The ASX 200 has jumped 12 per cent from its April lows after Trump paused his tariff plans, and the index is up about 0.7 per cent this calendar year.

Markets have been on a roller-coaster ride since US President Donald Trump’s tariffs announcements. Credit: Bloomberg

“The main driver of super funds being on track for OK returns is that markets have rebounded – that’s just the way sharemarkets work,” Dr Oliver said.

While large daily falls in the sharemarket grab the attention of the public and media, Oliver said focusing on these short-term falls missed the bigger picture: that sharemarkets had been performing fairly well.

“It’s the nature of sharemarkets that they go down in the elevator, and they come up via the stairs. When they are going up the stairs, it’s a very boring affair.”

As many experts have predicted, Oliver said there could be more volatility ahead due to uncertainty over Trump’s policies and the effect they would have on market conditions. Oliver said the damage to confidence caused by the trade war could well weaken the overall US economy, and there remained a risk that Trump could crank up tariffs again.

“We could still go through another round of volatility,” Oliver said.

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