Superannuation funds have recorded another impressive year of returns for members with international technology and Australian banking shares driving above average returns over 2024. Concerns over inflation caused a slow start to the year, with multiple negative monthly returns recorded until October 2023. Increased confidence in the outlook for inflation and ongoing developments in artificial intelligence led a market rally from November to March and while higher than expected inflation data led to a stumble in April, returns recovered quickly to finish the year strong. Given the significant range of outcomes across different months it remains important to focus on longer term outcomes, with funds continuing to prove they can deliver good outcomes over various market cycles.

All Balanced funds, those with a strategic allocation of between 60% to 76% of their portfolio invested in growth assets, are expected to deliver positive returns to members, while the top performing funds provided members with double digit returns over the financial year. Hostplus’ Indexed Balanced option was the top performing option in the SR50 Balanced (60-76) Index for the year ending June 2023, returning 12.2%, closely followed by Raiz Super’s Moderately Aggressive option and Colonial First State’s Enhanced Index Balanced option with returns of 12.1% and 11.4% respectively.

Top 10 Balanced options over 12 months to 30 June 2024

Rank Option Name 1 Year % 10 Year % p.a.
1 Hostplus – Indexed Balanced 12.2 7.7
2 Raiz Super – Moderately Aggressive 12.1
3 CFS-FC Wsale Pers – CFS Enhanced Index Balanced 11.4 6.7
4 ESSSuper – Balanced Growth 11.1
5 IOOF Employer Super – MLC MultiSeries 70 10.9 7.0
6 Brighter Super – Balanced 10.6
7 GESB Super – My GESB Super Plan 10.4 6.6
8 Qantas Super – Growth 10.1 7.3
9 Australian Retirement Trust – Super Savings – Balanced 9.9 8.1
10 MLC MKey Business Super – MLC Balanced 9.6 7.0
  SR50 Balanced (60-76) Index^ 8.8 7.0

^ indicates interim result.

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on options included in the SR50 Balanced Index.

 

The table above displays the top performing balanced funds for the year to 30 June 2024, as well as showing 10-year returns for options with a 10 year performance history, an important consideration given the long-term nature of superannuation investments.

In a repeat of 2023, funds with a higher exposure to shares and listed assets generally outperformed for the year, while those with greater exposure to unlisted property reported more subdued outcomes. As a result, members who were invested in index funds generally outperformed more actively managed options, given the strong focus on, and allocation towards, listed shares.

Top 10 Balanced Index options over 12 months to 30 June 2024

Rank Option Name 1 Year % 5 Year % p.a.
1 Aware Super Future Saver – Balanced Indexed 12.9
2 Hostplus – Indexed Balanced 12.2 7.2
3 Rest – Balanced Indexed 12.2 7.1
4 Australian Retirement Trust – Super Savings – Balanced Index 12.1 6.6
5 Brighter Super – Indexed Balanced 12.0 7.2
6 HESTA – Indexed Balanced Growth 11.9
7 netwealth Super Accelerator – Index Opportunities Growth Fund 11.5 5.3
8 AustralianSuper – Indexed Diversified 11.5 7.0
9 Cbus – Indexed Diversified 11.4
10 NGS Super – Indexed Growth 11.4 6.0

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on index options tracked by SuperRatings.

 

The top performing indexed fund was Aware Super’s Future Saver – Balanced Indexed option with a return of 12.9% for the year to June, while all top 10 indexed options returned double digits to members.

Top 10 MySuper Lifecycle options over 12 months to 30 June 2024

Rank Option Name Growth Assets % 1 Year % 10 Year % p.a.
1 Colonial First State Essential Super MySuper – Lifestage 1975-79 90 14.6
2 Colonial First State First Choice MySuper – Lifestage 1975-79 90 14.4 7.6
3 Virgin Money Super – LifeStage Tracker Born 1979 – 1983 90 13.2
4 Vanguard MySuper – Lifecycle Age 47 and under 90 13.2
5 Mine Super MySuper – Lifecycle Investment Strategy Under Age 50 95.2 12.5 8.2
6 Russell iQ Super MySuper – MySuper GoalTracker Age 50 and Under 95 12.3
7 GuildSuper MySuper – Growing Lifestage 75 11.6 7.5
8 Mercer SmartPath – MySuper Born 1979 – 1983 85 11.6 7.9
9 AMP SignatureSuper – MySuper 1970s 91 11.1 7.6
10 Aware Super Future Saver – MySuper Lifecycle High Growth 88 10.9 8.8

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on MySuper Lifecycle options for a member aged 45 or under tracked by SuperRatings.

 

Members who are invested in default options have also done well over the year with funds that have adopted a lifecycle investment style outperforming single default options. This is due to their higher allocation to shares, particularly for younger members. “We have noticed a trend of lifecycle options increasing their exposure to growth assets such as shares over the past 12 months” commented Kirby Rappell, Executive Director of SuperRatings. “While this has benefited members this year, higher exposure to these assets also comes with increased ups and downs, and we encourage members to learn how their fund’s investment strategy works so they are comfortable with annual and long-term performance outcomes.”

Top 5 Sustainable Balanced options over 12 months to 30 June 2024

Rank Option Name 1 Year % 5 Year % p.a.
1 Raiz Super – Emerald (SRI) 14.8 8.4
2 UniSuper – Sustainable Balanced 12.2 7.0
3 Vanguard Super SaveSmart – Ethically Conscious Growth 12.2
4 Aware Super Future Saver – Balanced Socially Conscious 11.1 7.5
5 Future Super – Balanced Index 10.1 5.3

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on SR Sustainable Balanced Survey for options with SAA of 60-76% growth assets tracked by SuperRatings.

 

Investments with a sustainable focus have also outperformed over the year with Raiz Super’s Emerald investment option reporting the highest balanced option return at 14.8%. The option was also the top performing sustainable option over 5 years, with a return of 8.4% per annum.

“While annual returns display interesting trends the purpose of superannuation is maximising returns over the long term” commented Mr Rappell. “Most of us will have plenty of time until we retire and begin to access our superannuation and therefore it is important to block out as much of the noise as possible and focus on how we are doing over the long term”.

Hostplus’ Balanced option remained the highest performing balanced option over 10 years returning 8.3% p.a. with the top 10 performers over ten years to June listed in the table below:

Top 10 Balanced options over 10 years to 30 June 2024

Rank Option Name 1 Year % 10 Year % p.a.
1 Hostplus – Balanced 7.6 8.3
2 Australian Retirement Trust – Super Savings – Balanced 9.9 8.1
3 AustralianSuper – Balanced 8.5 8.1
4 UniSuper – Balanced 9.2 7.9
5 Cbus – Growth (MySuper) 8.4 7.7
6 Hostplus – Indexed Balanced 12.2 7.7
7 Vision Super – Balanced Growth 8.4 7.6
8 HESTA – Balanced Growth 9.1 7.6
9 CareSuper – Balanced 8.5 7.6
10 Spirit Super – Balanced (MySuper) 8.8 7.5
  SR50 Balanced (60-76) Index^ 8.8 7.0

^ indicates interim result.

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on SR50 Balanced Index options with SAA of 60-76% growth assets tracked by SuperRatings.

 

“Investing in a range of assets for different markets has served Australian superannuation funds well. While we see different assets performing better or worse each year, superannuation continues to deliver for members over the long term with annual returns of 7.1% since compulsory superannuation began in 1992.” continued Mr Rappell.

What’s ahead in FY25

FY24 was a year of three parts shifting from a negative environment to a market rally and then a moderate pullback. Depending on when members need to begin drawing on their funds, they may have the option to ride out these ups and downs, however for members nearing, or in, retirement minimising these fluctuations can be a key factor in their retirement planning.

“Managing volatility is a key function for superannuation funds, with the need to consider downside risk increasingly evident over recent years.” said Mr Rappell. “While this has meant some funds that were more defensively positioned didn’t benefit as much from this year’s share rally, having strong diversification supports smoother returns over the long term”.

The table below shows the top 10 funds ranked according to their level of volatility, a measure of how much members are being rewarded for taking on the ups and downs in their balances.

Members in the Australian Retirement Trust QSuper product had the least ups and downs over the past seven years and returned of 5.3% p.a. over the period. This was followed by BUSSQ and CareSuper with returns of 6.1% pa and 7.1% pa respectively.

Top 10 Funds Based on Volatility-Adjusted Performance – 7 Year Return to 30 June 2024

Rank Option Name 7 Year % p.a.
1 Australian Retirement Trust – QSuper Accum. – Balanced 5.3
2 BUSSQ – Balanced Growth 6.1
3 CareSuper – Balanced 7.1
4 CSC PSSap – MySuper Balanced 6.7
5 ADF Super – MySuper Balanced 6.7
6 NGS Super – Diversified (MySuper) 6.6
7 IOOF Employer Super – MLC MultiActive Balanced 7.2
8 Rest – Core Strategy 6.5
9 Active Super – Balanced 6.6
10 Spirit Super – Balanced (MySuper) 6.7

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on SR50 Balanced Index with SAA of 60-76% growth assets tracked by SuperRatings.

 

As another financial year ends and funds begin to prepare annual statements, it’s a great time to review your superannuation settings. Regularly engaging with your superannuation will be time well spent when you see the potential impact on your retirement balance. Common things to check include if the investment option you’re in is suitable for your current stage of life and risk appetite, your current insurance cover and importantly that all your contact details are up to date. Funds often offer simple risk profiling tools on their website to help with investment decisions and checking on your details has never been easier with most funds offering multiple channels to do so such as by phone, online portals and even dedicated mobile apps.

If you are thinking of making a change, there are also multiple services that can help. SuperRatings has over 440 product ratings available on our website and funds themselves may offer access to advice services on a range of topics including investments, insurance, consolidation and retirement planning either directly or through associated adviser networks. Contact your fund to see what advice services are available but note there may be a cost for doing so. Make sure you check how much advice will cost and how you can pay for it before going ahead to ensure it’s right for you. Alternatively, you may wish to discuss your super with a trusted financial adviser to help understand whether your current super settings are appropriate for your personal situation. The Government also provides a comparison tool via the ATO website and information on how to select a financial adviser through the MoneySmart website.

 

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Require further information? Simply visit www.superratings.com.au

 

Super funds have delivered stronger than expected returns with the losses from the start of the financial year now a distant memory, and despite renewed fears around the trajectory of inflation. Leading superannuation research house SuperRatings estimates that the median balanced option returned 0.7% over the month of June, bringing the return for the year to 30 June 2024 up to an estimated 8.8%.

Executive Director of SuperRatings, Kirby Rappell, said “Fund returns have made a strong turnaround since November 2023 to deliver a second year of above average returns. Top performers will be handing members double digit returns for the year, reinforcing superannuation funds’ ability to deliver a competitive outcome for everyday Australians.”

Mr Rappell continued “Technology shares in the US and bank shares in Australia have really driven this year’s outcomes, meaning funds with higher levels of investments in these assets will have done well over the year. While ongoing cost of living pressures are hard to ignore, superannuation continues to support long-term financial outcomes, with most funds managing to keep performance in line with the typical CPI+3.0% investment objective over 10 years.”

The median growth option returned an estimated 0.8% over the month, while capital stable options, which hold more traditionally defensive assets such as cash and bonds, returned 0.6%.

Accumulation returns to 30 June 2024

  Monthly 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 0.7% 8.8% 4.7% 6.2% 6.7% 7.0%
SR50 Capital Stable (20-40) Index 0.6% 5.6% 2.5% 3.3% 3.8% 4.3%
SR50 Growth (77-90) Index 0.8% 10.5% 5.6% 7.5% 8.1% 8.3%

Source: SuperRatings estimates

Pension returns also ended the financial year strongly, with the median balanced pension option up an estimated 0.9% over June. The median growth option rose by 1.0% while the median capital stable option is estimated to deliver a 0.6% return for the month.

Pension returns to 30 June 2024

  Monthly 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SRP50 Balanced (60-76) Index 0.9% 10.0% 5.2% 6.9% 7.5% 7.9%
SRP50 Capital Stable (20-40) Index 0.6% 6.2% 2.8% 3.7% 4.3% 4.9%
SRP50 Growth (77-90) Index 1.0% 11.7% 6.0% 8.2% 8.8% 9.1%

Source: SuperRatings estimates

Super Performance Powers Through Market Uncertainty

The chart below shows that the average annual return since the inception of the superannuation system is 7.1%, with the typical balanced fund exceeding its long-term return objective of CPI+3.0%.

Similar to last year, international shares were the standout performers for super funds, with the sector estimated to return 17% as developments in artificial intelligence and associated industries led a small number of technology shares in the US to unprecedented highs. The Australian share market also made a strong contribution to super fund returns, with an estimated 11% return for the sector. We expect all major asset classes to contribute positively to fund returns for the year, although the fixed interest and property sectors had a tougher year and are expected to make the smallest contributions.

The small number of shares driving performance resulted in passive investment options, those which track a specific benchmark and often have a higher allocation to shares, outperforming most other strategies over the year. SuperRatings estimates the median passive balanced option will return 11.6% for the year, compared to 8.8% for the SR50 Balanced (60-76) Index, while 5-year performance for passive options is estimated to be 6.0%, compared to the SR50 Balanced (60-76) Index 5-year return of 6.2%.

We continue to emphasise the importance of setting a long-term strategy for your superannuation. Despite the strong performance over the past two years, we suggest members remain alert to market conditions and review their longer-term settings, such as whether they are in the most appropriate investment option for their situation and check their fees when they receive their annual statements.

Mr Rappell commented, “With the share market driving another strong year of returns members may be tempted to seek out higher exposure to these assets. However, risks remain, particularly around the trajectory for inflation in Australia and geopolitical factors such as ongoing wars and the upcoming presidential elections in the US. Members should be prepared to see their balances fluctuate and consider seeking professional advice before making changes. For those who are not approaching or in retirement, keep in mind that current market movements are not likely to be what you are thinking about when you retire 20 or 30 years from now.”

 

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Markets saw an improvement over May following April losses as equities stabilised. While not enough to fully regain the -1.6% fall in April, leading superannuation research house SuperRatings estimates that the median balanced option returned 1.0% to members over May.

“As we approach the end of the financial year, funds will be seeking to consolidate the strong returns over the past 11 months” commented Kirby Rappell, Executive Director of SuperRatings. “Despite the pull back in April, 2024 is looking to be a competitive year for fund performance.”

The median growth option grew by an estimated 1.1% for the month, while the median capital stable option, rose by a more modest 0.6%.

Accumulation returns to 31 May 2024

  Monthly FYTD 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 1.0% 8.1% 9.5% 5.2% 6.6% 6.6% 7.0%
SR50 Capital Stable (20-40) Index 0.6% 5.1% 5.4% 2.7% 3.4% 3.8% 4.3%
SR50 Growth (77-90) Index 1.1% 9.6% 11.5% 6.1% 8.0% 7.9% 8.2%

Source: SuperRatings estimates

Pension returns followed a similar pattern, with the median balanced pension option increasing by an estimated 1.1%. The median capital stable pension option is estimated to rise 0.7% over the month while the median growth pension option is estimated to rise 1.2% for the same period.

Pension returns to 31 May 2024

  Monthly FYTD 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SRP50 Balanced (60-76) Index 1.1% 9.1% 10.5% 5.7% 7.3% 7.4% 7.8%
SRP50 Capital Stable (20-40) Index 0.7% 5.5% 5.9% 3.0% 3.8% 4.2% 4.9%
SRP50 Growth (77-90) Index 1.2% 10.8% 13.0% 6.6% 8.8% 8.7% 9.0%

Source: SuperRatings estimates

Uncertainty remains high here and abroad around economic resilience and interest rates. However, to date, the resilience of super fund returns should be a source of some comfort for super fund members. We encourage members to block out the current market noise and focus on long-term strategy as the ups and downs are likely to continue for the foreseeable future. “Funds are on track to deliver high single digit returns for the financial year, with more growth focused options potentially reaching double digits if we see current momentum carry through June” continued Mr Rappell. “Most members should take comfort from funds achieving a second consecutive year of positive returns after the seesaw of returns over the past few years, as it further reinforces funds’ ability to navigate challenging investment markets”.

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Lonsec Holdings (Lonsec) is poised to further enhance its position as the pre-eminent provider of investment research, product ratings and managed account solutions as it announces today that its largest shareholder, Generation Development Group (GDG) is seeking to acquire 100% ownership of the Lonsec Group. Under the terms of the agreement, GDG will acquire the remaining interest in Lonsec for an upfront consideration of $197.4 million together with a deferred earn out payment of up to $55.7 million.

Lonsec considers GDG to be a highly  logical partner to accelerate the next phase of Lonsec’s growth.  The proposed transaction, which is subject to approval by GDG shareholders, will enable Lonsec to further accelerate its organic and inorganic growth strategy by providing greater access to capital, an expanded product suite and greater market access. The proposed acquisition presents multiple growth avenues to Lonsec including further development of Lonsec Investment Solutions and M&A opportunities.

Mike Wright, CEO of Lonsec, is pleased with the transaction, saying This is an exciting time for Lonsec and a recognition of the strength of the business we and those before us have built for our clients since 1994. GDG has been a substantial shareholder of Lonsec since 2020 and has a strong understanding of the Lonsec business and is committed to supporting Lonsec in its strategic plans to grow further.

“GDG are an ideal acquisition partner, intending to continue to operate Lonsec predominantly as a separate business, which means continiuty of our existing product and service propositions for our clients. This transaction will enable Lonsec to accelerate plans for further investment into its business and we are enthused about the opportunities this deal presents for the business and our clients.”

Grant Hackett – CEO of GDG, echoes these sentiments and comments Since we acquired an initial stake in Lonsec in 2020, we have witnessed the strong growth and success of the business driven by an excellent leadership team.  We are excited to increase our exposure to the business and help shape the next phase of growth for Lonsec.”

Lonsec was supported through the transaction by Luminis Partners as lead financial adviser, together with Baker McKenzie, McGrathNicol and EY Australia.

Highlights

  • Generation Development Group (ASX:GDG) acquired a minority holding in Lonsec Holdings (Lonsec) in September 2020,
  • GDG to acquire the remaining 61.9% of Lonsec’s fully diluted share capital, to be funded by a Conditional Placement and Equity Raising by GDG
  • On completion of the upcoming transaction, GDG will own 100% of the issued capital of Lonsec
  • The transaction will be settled through a combination of cash and scrip consideration
  • Subject to GDG shareholder approval, the transaction is expected to be completed in August 2024
  • GDG is committed to supporting the existing Lonsec business, further enabling accelerated growth and delivering greater balance sheet strength

For more information, you can access the GDG ASX Announcement here.

# ENDS #

About Lonsec

Founded in 1994, Lonsec has grown to become a pre-eminent Australian provider of investment and superannuation research, product ratings and managed account solutions. Lonsec is positioned at the nexus of Australia’s financial advice and investment industry, helping clients and investors make better investment decisions.

Lonsec comprises of four businesses – Lonsec Research, Lonsec Investment Solutions, Implemented Portfolios and SuperRatings. It is the leading Australian investment research house, providing financial product ratings, market insights and portfolio construction tools to empower the financial advice industry.

Its research and rating services are consistently recognised as the best in the market for quality, breadth, and adviser support. Lonsec also provides award winning, high growth managed account solutions that consistently outperform benchmarks and deliver clear value-add to advisers and clients. As at 30 April 2024, Lonsec manages over $10bn in a range of managed accounts accessible through all core administration platforms.

About Generation Development Group (GDG)

Founded in 1991, Generation Development Group Limited (GDG) is an ASX-listed company that specializes in providing development capital to financial sector businesses. GDG has over the years provided development capital to financial sector businesses.

GDG’s 100% owned subsidiary – GenLife offers a range of Investment Bonds and annuities which are designed to provide tax-effective investment solutions for investors.

Higher than expected inflation data has shifted the discussion around the outlook for interest rates in April, resulting in falling equity and fixed interest markets both in Australian and globally. This was reflected in superannuation returns as funds reported their first negative monthly return since October 2023. Leading superannuation research house SuperRatings estimates that the median balanced option fell by -1.6% over April.

“Sticky inflation caught up with investment markets in April as the reality of interest rates being higher for longer was being digested, and this flowed through to super returns” commented Kirby Rappell, Executive Director of SuperRatings. “But we encourage members to remember that this is the first time in six months that superannuation balances have fallen, and funds are still up over 7% for the financial year with two months remaining.”

The median growth option fell by an estimated -1.7% for the month, while the median capital stable option, with higher allocation to defensive assets fell by a more modest -1.0%.

Accumulation returns to 30 April 2024

  Monthly FYTD 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index -1.6% 7.1% 8.1% 5.3% 6.2% 6.6% 7.0%
SR50 Capital Stable (20-40) Index -1.0% 4.4% 4.5% 2.7% 3.3% 3.7% 4.4%
SR50 Growth (77-90) Index -1.7% 8.5% 9.9% 6.2% 7.6% 7.9% 8.2%

Source: SuperRatings estimates

Pension returns similarly fell over April, with the median balanced pension option falling by an estimated -1.9%. The median capital stable pension option is estimated to have fallen by -1.1% over the month while the median growth pension option is estimated to fall -2.0% for the same period.

Pension returns to 30 April 2024

  Monthly FYTD 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SRP50 Balanced (60-76) Index -1.9% 7.7% 8.9% 5.8% 6.9% 7.3% 7.7%
SRP50 Capital Stable (20-40) Index -1.1% 4.8% 5.0% 2.9% 3.6% 4.1% 4.9%
SRP50 Growth (77-90) Index -2.0% 9.4% 10.9% 6.7% 8.2% 8.6% 8.9%

Source: SuperRatings estimates

The trajectory for interest rates continues to drive the outlook for returns and while the Reserve Bank of Australia kept interest rates on hold this week, the prospect of interest rates remaining higher for longer remains very real. “We continue to believe there will be ups and downs over the coming months, however funds have consistently demonstrated their ability to navigate changing markets and provide strong long term outcomes for members. Setting and sticking to a long term strategy remains the best approach to achieving long term success and we encourage any member thinking of changing their strategy to seek advice from their fund or a trusted financial adviser” concluded Mr Rappell.

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

AMP Advice has engaged BlackRock Australia and Lonsec to introduce a new category of tailored managed portfolio solutions, making it accessible to more advice practices – a first of its kind in the Australian market.

Super funds once again delivered a boost to members in March with another month of investment gains. Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 1.9% for March. This takes the estimated return for the first 9 months of the financial year to 8.8%, making a double digit return a possibility depending on outcomes for the final quarter.

Super returns have proven resilient over the year so far with consistent positive performance driven by strong share markets both in Australia and internationally. “We have continued to see fund balances grow, despite ongoing uncertainty over the inflation outlook both here and abroad” commented Kirby Rappell, Executive Director of SuperRatings.

The median growth option gained an estimated 2.3% for the month, while the median capital stable option also rose by an estimated 1.1%.

Accumulation returns to 31 March 2024

  Monthly FYTD 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 1.9% 8.8% 11.2% 6.5% 6.9% 7.1% 7.3%
SR50 Capital Stable (20-40) Index 1.1% 5.4% 6.3% 3.3% 3.7% 4.0% 4.6%
SR50 Growth (77-90) Index 2.3% 10.5% 13.40% 7.7% 8.4% 8.4% 8.5%

Source: SuperRatings estimates

 

Pension returns also grew over March, with the median balanced pension option increasing by an estimated 2.2%. The median capital stable pension option is estimated to have grown by 1.2% over the month while the median growth pension option is estimated to increase by a 2.6% for the same period.

Pension returns to 31 March 2024

  Monthly FYTD 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 2.2% 9.9% 12.5% 7.0% 7.7% 7.8% 8.1%
SR50 Capital Stable (20-40) Index 1.2% 6.0% 7.1% 3.5% 4.0% 4.4% 5.1%
SR50 Growth (77-90) Index 2.6% 11.6% 15.0% 8.3% 9.2% 9.2% 9.4%

Source: SuperRatings estimates

Reflecting on Superannuation balances rebound since COVID

The following chart displays the change in the superannuation balance of a member who had $50,000 in their super account at the beginning of January 2020, before the COVID pandemic began to influence markets.

Assuming no additional contributions or deductions other than investment fees and taxes, a member who had $50,000 invested in the median balanced option at the beginning of 2020 would now have $64,406, while a member investing solely in an International Shares option would have $74,888 and a member who invested in cash would have a balance of $53,244. When measured from the depths of the COVID pandemic, the median international shares option within a super fund has returned 69% or 17% per annum since the lowest point of the pandemic, further highlighting the need for a long-term view on super.

While investing in international shares has provided the highest growth, what can also be seen is the additional uncertainty in account balance each month with the international share index displaying the largest ups and downs over the period.

“The COVID pandemic was a major event for financial markets around the world and while balances have recovered, we continue to see greater ups and downs in returns than prior to the pandemic” commented Mr Rappell. “With the benefit of hindsight, it is fair to say that we didn’t expect the strength of the returns experienced since the depths of the pandemic. With a decent chance of strong returns for financial year 2024, most members will be pleased to see their retirement savings growing, however the ups and downs are expected to remain, and we encourage members to focus on long term outcomes when reviewing their retirement settings”.

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Super returns maintained their momentum over the month as confidence that inflation is coming under control continued to build. Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 1.8% for February.

This brings the return to an estimated 6.7% for the median balanced option after the first 8 months of the financial year, which is a pleasing outcome given market uncertainty. “Superannuation funds have had a strong run since late last year with the positive February result was the fourth consecutive month of gains” commented Kirby Rappell, Executive Director of SuperRatings.

The median growth option gained an estimated 2.3% for the month, while the median capital stable option also rose by an estimated 0.7%.

Accumulation returns to February 2024

  Monthly FYTD 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 1.8% 6.7% 10.2% 6.5% 6.7% 7.0% 7.0%
SR50 Capital Stable (20-40) Index 0.7% 4.3% 6.2% 3.3% 3.7% 3.9% 4.5%
SR50 Growth (77-90) Index 2.3% 7.9% 12.0% 7.7% 8.1% 8.4% 8.2%

Source: SuperRatings estimates

Pension returns also grew over February, with the median balanced pension option increasing by an estimated 1.9%. The median capital stable pension option is estimated to have grown by 0.7% over the month while the median growth pension option is estimated to increase by a 2.5% for the same period.

Pension returns to February 2024

 

  Monthly FYTD 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 1.9% 7.5% 11.4% 7.1% 7.4% 7.8% 7.8%
SR50 Capital Stable (20-40) Index 0.7% 4.7% 6.9% 3.6% 3.9% 4.3% 5.1%
SR50 Growth (77-90) Index 2.5% 8.8% 13.4% 8.4% 8.8% 9.1% 9.0%

Source: SuperRatings estimates

“While the trajectory of inflation and central bank interest rates maintains market uncertainty, super funds continue to deliver gains for member balances, supporting stronger retirement outcomes. Super fund returns remain much less volatile than equity markets demonstrating the benefits of diversification and the ability of funds to weather these markets conditions with competitive outcomes for their members.”, continued Executive Director of SuperRatings, Kirby Rappell.

“For those members thinking about changing their investment option it is important to consider how long they will be investing for and the level of risk they are willing to take on. Members should seek advice from their fund or a trusted adviser before making changes to their investment strategy.” Mr Rappell added.

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Despite returns swinging between positive and negative throughout the year, super funds delivered strong returns for members over 2023, boosted by a share rally in the final quarter of the calendar year. The median Balanced option reported a 2.7% return in December, and 9.6% for the full 2023 calendar year, fully recovering the
-4.8% loss from the previous year.

Accumulation returns to 31 December 2023

  Monthly 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 2.7% 9.6% 5.9% 7.1% 6.7% 6.8%
SR50 Capital Stable (20-40) Index 2.0% 6.5% 2.8% 3.9% 3.9% 4.4%
SR50 Growth (77-90) Index 3.0% 11.0% 7.0% 8.6% 7.9% 7.9%

Source: SuperRatings estimates

The median growth option returned 3.0% in December and 11.0% over the year, while a smaller allocation to shares resulted in the median capital stable option returning 2.0% for the month and 6.5% across the year.

International shares have been the standout performer over the year, led by strong growth in technology shares. Returns were also strongly supported by Australian shares and further bolstered by rising cash rates improving fixed interest and cash returns.

*Balances are based on monthly SR Index returns and assume no additional contributions over the investment period. Returns are calculated net of investment fees and taxes but do not consider administration fees or other potential deductions from member’s accounts.

Funds have also delivered for members over the longer term. An investment of $100,000 in the median balanced option 10 years ago would now be worth $189,005 while investing in the median growth option would now be worth $201,539. Members who invested in cash would have $117,637.

The highest SuperRatings Balanced Index returns over the year was 13.2% for members in the Hostplus – Indexed Balanced option, closely followed by Brighter Super Optimiser Accumulation – Multi-Manager Growth Fund returning 13.1% while ESSSuper – Balanced Growth completes the top 3 returning 12.8%.

Top 20 balanced options over 12 months to 31 December 2023

Rank Option Name 1 Year % 10 Year % PA
1 Hostplus – Indexed Balanced 13.2 7.3
2 Brighter Super Optimiser Accumulation – Multi-Manager Growth Fund 13.1
3 ESSSuper – Balanced Growth 12.8
4 CFS-FC Wholesale Personal – CFS Enhanced Index Balanced 11.9 6.5
5 Vision Super – Balanced Growth 11.7 7.5
6 IOOF Employer Super Core – MLC MultiSeries 70 11.4 6.8
7 Aware Super Future Saver – Balanced 11.0 7.2
8 GESB Super – My GESB Super Plan 10.7 6.3
9 TWUSUPER – Balanced 10.6 6.7
10 HESTA – Balanced Growth 10.5 7.4
11 ANZ Smart Choice Super – Growth 10.4 6.0
12 UniSuper – Balanced 10.3 7.8
13 Prime Super – MySuper 10.3 7.1
14 Australian Retirement Trust – Super Savings – Balanced 10.2 7.9
15 NESS – NESS MySuper 10.2 6.6
16 Raiz Super – Moderately Aggressive 10.2
17 REI Super – Balanced 10.2 6.5
18 Equip Super MyFuture – Balanced Growth 10.2 7.2
19 Brighter Super Accumulation – Balanced 10.1 6.8
20 smartMonday PRIME – Balanced Growth – Active 10.1 6.3
SR50 Balanced (60-76) Index 9.6 6.8

*Performance tables are based on options included in the SR50 Balanced Index and do not represent all Balanced (60-76) options offered by superannuation funds. Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings.

Superannuation remains a long-term investment for most, with many members having several decades of returns before retirement. It is therefore important to remain focused on longer term returns, with the top performing funds over 10 years listed below.

The Hostplus – Balanced option remains the top performer over the long-term, with an average annual return of 8.3%, and is the only fund in our index with a higher than 8% annual return over 10 years.

Top 20 balanced options over 10 years to 31 December 2023

Rank Option Name 1 Year % 10 Year % pa
1 Hostplus – Balanced 8.5 8.3
2 AustralianSuper – Balanced 9.0 7.9
3 Australian Retirement Trust – Super Savings – Balanced 10.2 7.9
4 UniSuper – Balanced 10.3 7.8
5 Cbus – Growth (MySuper) 9.5 7.6
6 Vision Super – Balanced Growth 11.7 7.5
7 CareSuper – Balanced 9.0 7.5
8 HESTA – Balanced Growth 10.5 7.4
9 Spirit Super – Balanced (MySuper) 10.0 7.4
10 Hostplus – Indexed Balanced 13.2 7.3
11 Australian Food Super Employer – Balanced 9.5 7.3
12 Aware Super Future Saver – Balanced 11.0 7.2
13 First Super – Balanced 9.4 7.2
14 Equip Super MyFuture – Balanced Growth 10.2 7.2
15 Qantas Super – Growth 8.8 7.1
16 Prime Super – MySuper 10.3 7.1
17 IOOF Employer Super Core – MLC MultiActive Balanced 9.4 7.0
18 TelstraSuper Corporate Plus – Balanced 8.9 6.9
19 Australian Ethical Personal – Balanced 9.7 6.9
20 BUSSQ Premium Choice – Balanced Growth 8.8 6.9
SR50 Balanced (60-76) Index 9.6 6.8

*Performance tables are based on options included in the SR50 Balanced Index and do not represent all Balanced (60-76) options offered by superannuation funds. Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings.

With shares driving most of 2023’s returns, passive investment options, where a fund tracks a specified index, performed well over the year. The table below displays the top 10 passive fund returns over 2023 and over 5 years, with most of these options having been available within superannuation for a shorter length of time.

Top 10 balanced passive options over 12 months to 31 December 2023

Rank Option Name 1 Year % 10 Year % pa
1 Aware Super Future Saver – Balanced Indexed 14.3
2 Rest – Balanced Indexed 13.5 8.4
3 HESTA – Indexed Balanced Growth 13.3
4 Hostplus – Indexed Balanced 13.2 8.4
5 netwealth Super Accelerator Core Emp – Index Opportunities Growth Fund 13.1 6.7
6 Australian Retirement Trust – Super Savings – Balanced Index 12.9 7.9
7 ClearView WealthFoundations Super – IPS Index Base 70 12.9
8 Brighter Super Accum – Indexed Balanced 12.8
9 Cbus – Indexed Diversified 12.7
10 AustralianSuper – Indexed Diversified 12.5 8.1

*Performance tables are based on passive options with a growth asset allocation between 60%-76%. Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings.

As we have seen MySuper offerings develop in recent years, it is also worthwhile to note that lifecycle funds had a strong year. These funds reduce members exposure to growth assets, generally from around age 45-55, and therefore have a higher exposure to growth assets than Balanced options. With growth assets performing well, these options have done well for members in 2023.

We have taken a representative cohort below, showing the returns expected to have been realised for younger members (<45 years old) in these products.

Lifecycle performance over 12 months to 31 December 2023

RANK LIFECYCLE OPTION TYPE GROWTH ASSETS 1 YEAR % 5 YEAR % PA
1 GuideSuper & Child Care MySuper – Building Lifestage High Growth (91-100) 98 14.8 9.0
2 Vanguard MySuper – Lifecycle Age 47 and under Growth (77-90) 90 14.7
3 Virgin Money Super – LifeStage Tracker Born 1979 – 1983 Growth (77-90) 90 14.4 9.2
4 Essential Super MySuper – Lifestage 1980-84 High Growth (91-100) 93 13.8 7.9
5 CFS FC MySuper – Lifestage 1980-84 High Growth (91-100) 93 13.6 7.9
6 Mine Super MySuper – Lifecycle Investment Strategy Age 50 and Under High Growth (91-100) 98 13.6 9.3
7 Russell iQ Super MySuper – MySuper GoalTracker Age < 50 High Growth (91-100) 95 13.3

*Table above shows lifecycle funds tracked by SuperRatings. Representative cohort above is for members 40-45 years old. Returns for younger members in these solutions are generally comparable to those above.

The table above shows that we are seeing greater levels of competition across the market, which is a good thing for consumers. While we have seen mixed outcomes for lifecycle since 2014, it is pleasing to see the renewed competition coming to market for default members in these solutions. Generally, these funds have higher allocations to listed equities, which has supported their performance outcomes in 2023.

While we see inflation slowing into 2024, as the impact of the interest rate rises throughout 2023 softens consumer demand, we expect to see continued ups and downs, as markets remain sensitive to local and global events. The new year is a good time for members to consider the level of ups and downs they are willing to tolerate and do a health check on their fund across performance, fees and insurance.

2023 was another eventful year for Australia’s superannuation members, with funds navigating a range of market environments and shocks as well as ongoing and expanded scrutiny of how well their investments are performing.

We have seen a slowing of funds merging and investment menus consolidating with a significant number of funds now well into their journey towards realising merger benefits and, hopefully, being able to pass those back to members through better servicing and investment performance. In our latest review we rated over 400 superannuation products. Our product ratings are accessible on our website here.

SuperRatings Executive Director Kirby Rappell said, “Members are likely pleased with this year’s performance, with most seeing a full recovery from last year’s losses. Long term strategy and high levels of diversification continue to result in impressive long-term performance by those managing our retirement savings. As we look ahead to what 2024 might bring for super fund returns, ongoing uncertainty means it remains important to set a strategy and stick with it despite the potential for periods of falling balances.”

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Expectations of peak inflation drove positive returns across most sectors of the market in November, leading to a bounce in returns following the subdued earnings reported between August and October. Leading research house SuperRatings estimates the median balanced option will deliver a return of 3.1% for the month of November.

“Despite the uncertainties around inflation, markets, and rates, we have seen funds recording strong returns into Christmas.” commented Kirby Rappell, Executive Director of SuperRatings.

The median growth option similarly experienced a strong month with an estimated 3.5% gain, while the median capital stable option experienced a more modest return of 2.0% owing to a lower exposure to shares.

Accumulation returns to November 2023

  Monthly 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 3.1% 4.6% 5.3% 6.4% 6.5% 6.6%
SR50 Capital Stable (20-40) Index 2.0% 3.1% 2.2% 3.5% 3.7% 4.3%
SR50 Growth (77-90) Index 3.5% 5.3% 6.5% 7.7% 7.9% 7.8%

Source: SuperRatings estimates

November’s strong performance was also reflected in pension returns, with the median balanced pension option returning an estimated 3.4%. The median growth option is estimated to see a gain of 3.9% for the month, while the median capital stable pension option is estimated to deliver a 2.3% return.

Pension returns to November 2023

  Monthly 1 yr 3 yrs
(p.a.)
5 yrs
(p.a.)
7 yrs
(p.a.)
10 yrs
(p.a.)
SR50 Balanced (60-76) Index 3.4% 5.0%  5.8%  7.2%  7.5% 7.5%
SR50 Capital Stable (20-40) Index 2.3%  3.4%  2.7%  3.9%  4.1% 4.5%
SR50 Growth (77-90) Index 3.9% 6.0%  6.8%  8.5%  8.7%  8.6%

Source: SuperRatings estimates

The estimated gains in November are set to recover most of the losses over the last few months, setting up a modest, but positive, scene for most members as they approach the halfway point of the financial year. SuperRatings estimates the median fund will provide members with a 1.0% gain for the first 5 months of the financial year.

Despite modest returns over the second half of the year, funds are on track to deliver a 6.8% return after the first 11 months of the calendar year for the median balanced option. While the final result will be dependent on December performance, members are expected to see a reasonable positive return for calendar year, which may be similar to the estimated 6.4% p.a. for the median balanced option since 2000.

“We continue to believe that inflation will be a strong driver of markets in 2024, coupled with softening consumer demand; however, most members should remain reassured by super funds ability to navigate the range of market conditions we’ve seen over the past few years.” commented Mr Rappell. “December has been more mixed for shares so far, however there is still potential for a Santa rally in the second half of the month, and we encourage members to remain focused on their long-term outcomes.”

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Important information: Any express or implied rating or advice is limited to general advice, it doesn’t consider any personal needs, goals or objectives.  Before making any decision about financial products, consider whether it is personally appropriate for you in light of your personal circumstances. Obtain and consider the Product Disclosure Statement for each financial product and seek professional personal advice before making any decisions regarding a financial product.