Know Your Investments

Market volatility and the need for calm 

Sam Sicilia, Chief Investment Officer

Investing in share markets means from time to time your superannuation balance will go down instead of up. The first half of 2022 demonstrated this, fuelling concerns of bigger falls to come.

History shows us that this volatility can spook members, prompting moves like switching super balances to less volatile options, such as cash options.

But it’s important that members use moments like these to pause and reflect on their objectives.  And to remember what we’ve seen recently is a normal part of investing in assets like shares.

We’re here to help our members make informed decisions so they can maximise their retirement outcomes.  

What drives share markets?

Share markets rise and fall based on many different factors. In 2022, worries about interest rates and inflation, along with the ongoing disruption due to Omicron and the Russian invasion of Ukraine, led to markets falling.

These recent falls are minor when we look at historical comparisons. Think of the global stock market crash of 1987, the tech bubble of 2000 or the global financial crisis of 2008. Those falls were much more severe, but the markets rebounded each time.  

Global sharemarkets have seen many ups and downs in the past 25 years

MSCI World Index
Source: MSCI World Index. Chart shows the aggregate performance (in US dollars) of sharemarkets in developed economies over the 25 years to 31 May 2022.

In the current environment, low interest rates and supportive monetary policies, which have been in place for more than a decade, have given markets a massive boost. Plus, significant government spending due to the pandemic has provided a “sugar hit” to markets.

We believe interest rates will remain low for some time. For that to change, wages would need to increase significantly. Australia’s wage growth has remained stubbornly low for years, and that’s not just because of the pandemic.

Things to consider before you switch options

So what does all this mean? Should you go looking for your own “sugar hit” and switch investment options in search of a better outcome?

Recent research by Iress and Griffith University shows that out of 42,000 superannuation switch decisions made between 1 January 2019 and 31 March 2021, there was a 50% increase in “bad” switches.  

That is, a negative impact on super balances compared with doing nothing.

When COVID first impacted markets between February and April 2020, more than 10,000 Hostplus members switched out of our MySuper Balanced option into more defensive options like Cash, transferring more than $1 billion in total. Unfortunately, 72% of those members hadn’t switched back by the end of 2020, missing out on positive returns when the Balanced option rebounded.  

Hypothetically, if a typical Hostplus member1 switched into our Cash option halfway through that market downturn, but didn’t switch back to Balanced until the end of 2020, they would have missed out more than $5,000 of returns as of May 2022. If they never switched back, remaining in Cash, they could have missed out on more than $10,000 as of May 2022.  

Why long-term performance matters

Our investment strategy is highly diversified and built for the long term. It has delivered excellent long-term results for Hostplus members.

It’s a strategy focused on our members' best financial interests, now and into the future.

Our leading investment returns reflect advantages of scale and stability and the importance of a robust, long-term investment strategy which aims to withstand market volatility and unexpected events, such as a pandemic.

Our Balanced option is ranked number one for investment performance over 7, 10, 15 and 20 years2. It has delivered an average return of 8.27% per year over that 20-year period.2  

These results speak for themselves. And we’re proud to have you with us at Hostplus.  

Finding the right investment option

Hostplus offers members a range of financial advice tools to help you make appropriate investment choices. Our digital advice tool, Super Adviser, is a quick and easy DIY online tool you can access through Member Online. If you’d like more comprehensive advice, you can also speak to an expert financial planner.  

Visit our financial planning page to find the service that suits your needs.

[1] Calculated using Hostplus accumulation members’ average balance of $39,060 as at December 2019. Compares daily unit prices for the Balanced option and the Cash option, using an initial switch date of 20 March 2020. Does not account for contributions.
[2] Source: SuperRatings Accumulation Fund Crediting Rate Survey – SR50 Balanced (60–76) Index, December 2021.

This information is general advice only and does not take into account your personal objectives, financial situation or needs. You should consider if this information is appropriate for you in light of your circumstances before acting on it. Please read the relevant Hostplus Product Disclosure Statement (PDS), available at before making a decision about Hostplus. For a description of the target market, please read the Target Market Determination (TMD), available at
Past performance is not a reliable indicator of future performance and should never be the sole factor considered when selecting a superannuation fund.
Hostplus has engaged Industry Fund Services Limited (IFS) ABN 54 007 016 195, AFSL 232514 to facilitate the provision of personal financial advice to members of Hostplus. Advice is provided by financial planners who are Authorised Representatives of IFS. Fees may apply. Further information about the cost of advice is set out in the relevant IFS Financial Services Guide, a copy of which is available from your financial planner.  
Hostplus has engaged Link Advice Pty Ltd ABN 36 105 811 836, ASFL 258145 to facilitate the provision of limited personal financial advice to members of Hostplus via the web-based product Super Adviser.
Issued by Host-Plus Pty Limited ABN 79 008 634 704, AFSL 244392 as trustee for the Hostplus Superannuation Fund (the Fund) ABN 68 657 495 890, MySuper No 68 657 495 890 198.