The median balanced option delivered a return of 1.5% in July according to estimates from leading superannuation research house SuperRatings, with funds continuing to build on the momentum in markets seen over the final quarter of FY23.

The impact of inflation continues to drive markets with most Australian and global equities delivering modest returns, while energy and commodities performed well over July. We expect returns will remain bumpy over the short term, despite the Reserve Bank of Australia taking a wait and see approach in both July and August following indications that the tightening cycle is beginning to have a clearer impact on spending and consumption.

The median growth option rose by an estimated 1.8%, while the median capital stable option delivered a small positive result, with an increase of 0.8%.

Accumulation returns to July 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 1.5% 7.2% 7.8% 5.9% 6.7% 7.2%
SR50 Capital Stable (20-40) Index 0.8% 3.6% 3.2% 3.1% 3.7% 4.5%
SR50 Growth (77-90) Index 1.8% 9.2% 9.4% 7.0% 8.3% 8.5%

Source: SuperRatings estimates

Pension returns also increased in July, with the median balanced pension option up an estimated 1.7%. The median growth option is estimated to rise 2.0% for the month while the more defensive median capital stable pension option is estimated to deliver a 0.9% return.

Pension returns to July 2023

 

Monthly

1 yr 3 yrs (p.a.) 5 yrs (p.a.) 7 yrs (p.a.)

10 yrs (p.a.)

SRP50 Balanced (60-76) Index 1.7% 8.2% 8.5% 6.6% 7.6% 8.0%
SRP50 Capital Stable (20-40) Index 0.9% 3.8% 3.7% 3.5% 4.1% 5.0%
SRP50 Growth (77-90) Index 2.0% 10.1% 10.0% 7.6% 8.8% 9.2%

Source: SuperRatings estimates

Executive Director of SuperRatings, Kirby Rappell commented, “Funds have had a strong finish to FY23 with the median balanced fund returning 9.1% over the year to June and it is pleasing to see funds maintaining that momentum into the first month of FY24.”

With funds in the process of preparing annual statements, it is a great time to think about reviewing your superannuation arrangements. There are some simple rules of thumb to check including the level of fees you are paying, the performance of your investments and how much insurance cover you have.

If you are unsure of what settings are suitable for you, reach out to your fund to see what services they might offer to help you make these decisions or talk to a trusted adviser and remember to check if there is any cost associated with accessing these services before you agree to them.

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

With superannuation funds finalising their returns to 30 June 2023, it is clear that super has delivered a competitive outcome during uncertain times. This is particularly pleasing following the -3.4% loss reported a year ago. Share markets rebounded strongly over the year with international shares driving fund returns, albeit well supported by Australian shares.

All Balanced funds, those with between 60% to 76% of their portfolio invested in growth assets, are expected to deliver positive returns to members, while the top 10 funds provided members with returns of over 9.5% for the financial year and members in several of the best performers will be receiving double digit returns. ESSSuper was the top performing Balanced fund for the year ending June 2023 returning 13.3% for its Balanced Growth option, which was renamed from Basic Growth on the 1st of July 2023. This was followed by Vision Super’s Balanced Growth option and Brighter Super’s Balanced Option with returns of 11.0% and 10.6% respectively.

Daniel Selioutine, ESSSuper’s Group Executive, Investments commented: “Performance over the last 12 months has been a welcome result for our members and follows a multi-year program of reorienting the portfolio towards areas of competitive advantage. Our shorter term performance is explained by our positioning in equities and bonds, however our dedicated investment team remains firmly focussed on delivering longer-term investment outcomes to members.”

Top 10 Balanced Options over 12 months

As at 30 June 2023

 

Rank Option Name 1 Year % 10 Year % pa
1 ESSSuper Accum – Basic Growth 13.3
2 Vision SS – Balanced Growth 11.0 8.1
3 Brighter Super Accum – Balanced 10.6 7.3
4 UniSuper Accum (1) – Balanced 10.3 8.4
5 Equip MyFuture – Balanced Growth 10.1 7.8
6 Australian Retirement Trust – Super Savings – Balanced 10.0 8.4
7 IOOF Employer Super Core – IOOF MultiSeries 70 9.8 7.2
8 Aware Super Future Saver – Balanced 9.7 7.9
9 Mercer Super Trust – Mercer Select Growth 9.6
10 HESTA – Balanced Growth 9.6 8.0
  SR50 Balanced (60-76) Index 9.0 7.5

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 primary Balanced option by FUM within SR50 Balanced Index.

The table above displays the performance of the top performing balanced funds for the year to 30 June 2023, as well as showing 10-year returns which is an important consideration given the long-term nature of superannuation investments.

The second half of the financial year provided the majority of gains for funds, led by a rally in international shares. A key theme for returns in 2023 was that funds with higher exposure to shares generally outperformed for the year, while those with greater exposure to unlisted property and alternatives reported more subdued outcomes. As a result, members who were invested in index funds generally did quite well, given the strong focus on listed shares in these options.

Top 5 Passive Balanced Options over 12 months

As at 30 June 2023

 

Rank Option Name 1 Year % 10 Year % pa
1 HESTA – Indexed Balanced Growth 12.5
2 Rest – Balanced Indexed 12.4
3 Hostplus – Indexed Balanced 12.3 7.9
4 Brighter Super – Indexed Balanced 11.7
5 AustralianSuper – Indexed Diversified 11.6 7.2

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 passive options with SAA of 60-76% growth assets tracked by SuperRatings.

The top performing indexed fund was HESTA’s Indexed Balanced Growth option with a return of 12.5% for the year to June. While this sits slightly lower than the top performing balanced option, over the past 12 months, balanced index options have tended to outperform their more actively managed equivalents.

Top 5 Sustainable Balanced Options over 12 months

As at 30 June 2023

 

Rank Option Name 1 Year % 10 Year % pa
1 Raiz Super – Emerald (SRI) 13.3
2 Super SA Triple S – Socially Responsible* 12.1 7.3
3 UniSuper Accum (1) – Sustainable Balanced 11.0 8.2
4 Aware Super Future Saver – Balanced Socially Conscious 10.9 8.4
5 Future Super – Balanced Index 10.5

*This option is tax exempt for members
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 matching the top performing balanced option with a return of 13.3%.

“As we see funds offering members a range of investment options, it is worthwhile to note we are seeing different options perform well in different market conditions” commented Executive Director of SuperRatings, Kirby Rappell. “However, members should remember that superannuation is a long-term investment, and most of these options are still relatively new in superannuation terms. While short term trends may be topical, longer term trends are our primary focus as we want to see which funds have performed well over the long term and their alignment with their member’s outcomes.”

Hostplus’ Balanced option remained the highest performing balanced option over 10 years returning of 8.9% p.a. with the top 10 performers over ten years to June listed in the table below:

Top 10 Balanced Options over 10 years

As at 30 June 2023

 

Rank Option Name 1 Year % 10 Year % pa
1 Hostplus – Balanced 8.0 8.9
2 AustralianSuper – Balanced 8.2 8.6
3 Australian Retirement Trust – Super Savings – Balanced 10.0 8.4
4 UniSuper – Balanced 10.3 8.4
5 Cbus – Growth (MySuper) 9.0 8.3
6 Vision Super – Balanced Growth 11.0 8.1
7 CareSuper – Balanced 9.1 8.0
8 HESTA – Balanced Growth 9.6 8.0
9 Aware Super Future Saver – Balanced 9.7 7.9
10 Spirit Super – Balanced (MySuper) 9.2 7.8
  SR50 Balanced (60-76) Index 9.0 7.5

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.

“We observed funds reviewing and writing down their unlisted asset valuations at the end of the financial year, contributing to the moderately weaker annual performance of funds with significant exposure to these assets in FY23; however, over the long term, they have added value to member outcomes, with many of the top performing options over 10 years having exposure to alternative assets” continued Mr Rappell. “Superannuation continues to deliver for members over the long term with annual returns of 7.1% since compulsory superannuation began in 1992.”

Expect more ups and downs in FY24

 

While funds benefited from strong performance in shares over the second half of the year, FY23 continued the trend of increased fluctuation in member account balances with 5 out of the 12 months in the year having negative performance. Members who are still some distance from retiring can afford to ride-out these ups and downs as these will be a distant memory by the time they retire, but for members nearing, or in, retirement minimising these fluctuations can be a key factor in their retirement planning.

“Since the onset of the COVID-19 pandemic, managing volatility has really come back into focus for funds after almost a decade of steady gains. The sharp rise in inflation and global uncertainty has been a constant over the past couple of years and we expect this to persist.” said Mr Rappell.

The table below shows the top 10 funds ranked according to their volatility-adjusted return, which measures how much members are being rewarded for taking on the ups and downs in their balances.

CareSuper, which was the winner of the SuperRatings Smooth Ride award in 2022, for being able to manage the ups and downs, sits at the top of the table with its Balanced option return of 7.5% p.a. over the past 7 years. This was closely followed by Australian Retirement Trust’s Super Savings Balanced option with a return of 8.3% pa.

Top 10 Funds Based on Volatility-Adjusted Performance with 7 Year Return Shown

As at 30 June 2023

 

Rank Option Name Rolling 7 Year %
1 CareSuper – Balanced 7.5
2 Australian Retirement Trust – Super Savings – Balanced 8.3
3 Hostplus – Balanced 8.6
4 Qantas Super – Growth 7.8
5 Aware Super Future Saver – Balanced 7.7
6 Cbus – Growth (MySuper) 7.6
7 AustralianSuper – Balanced 8.1
8 HESTA – Balanced Growth 7.7
9 Vision Super – Balanced Growth 8.0
10 IOOF Employer Super – MultiMix Balanced Growth Trust 7.2

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.

Suzanne Branton, Chief Investment Officer at CareSuper commented, “Through its history CareSuper’s investment approach has delivered high long term returns with lower risk.  High returns are important, but we also care for our members by protecting their savings when markets are volatile and uncertain. We are pleased to consistently rank amongst the highest risk-adjusted returns, that’s our goal. Many think members don’t recognise risk-adjusted returns, but we know members understand when the environment becomes difficult – they can see the cost of living and mortgage rates are much higher. Given the complex outlook, we expect our dual purpose will be valued by members in times to come.”

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 450 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

 

Equity markets remained strong over June with the superannuation industry closing out the year with returns that more than made up for last year’s losses. Leading superannuation research house SuperRatings estimates that the median balanced option returned 1.2% over the month of June, strengthening an already positive annual return to 8.5% for the year to 30 June 2023. This follows on from the -3.4% return last financial year, demonstrating the industry’s ongoing ability to navigate an uncertain market environment.

Executive Director of SuperRatings, Kirby Rappell said, “While there are significant conversations about interest rate rises, inflation and global uncertainty front and centre within the economy, it is reassuring to see superannuation funds’ ability to deliver a competitive outcome for everyday Australians.”

Mr Rappell continued “While economic pressures are hard to ignore, superannuation continues to perform well on a long-term basis with most funds managing to keep performance in line with the typical CPI+3.0% investment objective over 10 and 30 years. We expect funds may struggle to meet their inflation plus objectives over the short term, particularly as inflation remains elevated; however, super funds have done well to capitalise on the opportunities available to ensure members’ super account balances continue to grow. While the current cost of living is certainly putting pressure on many Australians, superannuation continues to play its part for people’s longer term financial outcomes.”

The median growth option returned an estimated 1.4% over the month, while capital stable options which hold more traditionally defensive assets such as cash and bonds returned 0.3%.

Accumulation returns to June 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 1.2% 8.5% 7.4% 5.7% 6.8% 7.4%
SR50 Capital Stable (20-40) Index 0.3% 4.5% 3.1% 3.1% 3.7% 4.5%
SR50 Growth (77-90) Index 1.4% 11.1% 9.0% 6.8% 8.2% 8.7%

Source: SuperRatings estimates

Pension returns also ended the financial year strongly, with the median balanced pension option up an estimated 1.3% over June. The median growth option rose by 1.6% while the median capital stable option is estimated to deliver a 0.3% return for the month.

Pension returns to June 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 1.3% 9.8% 8.2% 6.4% 7.7% 8.3%
SR50 Capital Stable (20-40) Index 0.3% 5.1% 3.7% 3.5% 4.2% 5.1%
SR50 Growth (77-90) Index 1.6% 12.2% 9.6% 7.5% 9.2% 9.4%

Source: SuperRatings estimates

Super Performance Continues to Exceed Targets

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%.

 

This year international equities were the standout performers for super funds, with Australian equities and listed property also supporting the strong performance over the year. Unlisted assets, such as unlisted property, have placed a bit of a drag on returns, with a significant number of funds writing down unlisted valuations. These assets have performed well over the long term and provided crucial diversification within portfolios. More defensive options had a tougher year with smaller allocations to equities and a relatively subdued return from fixed interest, however cash options did provide a small silver lining as returns rose off the back of central bank rate rises.

We continue to emphasise the importance of setting a long-term strategy for your superannuation. Despite the strong performance over the past year, we suggest members remain alert, but not alarmed, 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 check their annual statements.

Mr Rappell commented, “12 months ago, we did not anticipate an 8% return for this year and so, many people would see this as a positive. Further, long term returns remaining strong. However, we expect the ups and downs observed over the last 12 months to continue and members should be prepared for their balances to fluctuate. If you are not approaching or in retirement, keep in mind that all market movements in the short term are not likely to be what you are thinking about when you retire in 20 or 30 years time.”

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For more information contact:

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

Stubbornly high inflation and a return to tightening monetary policy by the Reserve Bank of Australia has led to persistent uncertainty in markets over the past year. Superannuation fund returns are expected to be slightly negative over the month, with leading superannuation research house SuperRatings estimating the median balanced option generated a return of -0.2% for May. Despite the uncertain outlook for inflation, we estimate financial year to date returns on a Balanced (60-76) option to be 7.9% as at the end of May. Depending on returns throughout June, super funds are on track to manage a return above inflation for the past 12 months.

The median growth option fell by an estimated -0.3% over May, while the median capital stable option is estimated to decline by -0.2%.

Accumulation returns to May 2023

 

 

  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 -0.2% 7.9% 4.0% 7.4% 5.9% 6.6% 7.3%
SR50 Capital Stable (20-40) Index -0.2% 4.4% 2.6% 3.2% 3.2% 3.7% 4.5%
SR50 Growth (77-90) Index -0.3% 9.6% 5.0% 9.1% 6.8% 7.7% 8.5%

Source: SuperRatings estimates

Pension returns saw a similar fall over May with the median balanced pension option estimated to decline by -0.3%. The median growth pension option is also estimated to fall by -0.3%, while the median capital stable pension option fell by an estimated ‑0.2% over the month.

Pension returns to May 2023

  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 -0.3% 8.6% 4.7% 8.0% 6.4% 7.5% 8.0%
SR50 Capital Stable (20-40) Index -0.2% 4.9% 3.2% 3.7% 3.5% 4.1% 4.9%
SR50 Growth (77-90) Index -0.3% 10.6% 5.5% 9.7% 7.6% 8.6% 9.2%

Source: SuperRatings estimates

Executive Director of SuperRatings Kirby Rappell commented, “While May saw a small fall, funds are currently on track to deliver a return in excess of inflation, so funds have kept the value of members money from diminishing in a high inflation environment, which has been no simple task.”

 

 

In dollar terms, members with $100,000 invested in the Balanced option at the start of July last year would have an estimated $107,833 in their account at the end of May, not accounting for administration fees or any insurance premiums they may pay. Members investing in the more defensive Capital Stable option would have an estimated $104,677 with smaller ups and downs throughout the year, while members that limited their investments to Cash would have a lower overall balance of $102,358 while seeing small gains each month. This demonstrates that fund’s investment strategies are behaving as expected by trading off between account growth and a smooth return, even in such uncertain times.

“Inflation, and the central bank response to inflation, have been the most influential factors for superannuation performance this financial year and we expect this to continue into FY24. Super fund returns have had a bumpy year with markets facing several shocks over the last 11 months; however, funds continue to navigate the challenges well with most accounts seeing growth over the course of the full year”, Mr Rappell continued.

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For more information contact:

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

Markets continued their upward trajectory in April with leading superannuation research house SuperRatings estimating the median balanced option generated a return of 1.2% for the month, driven by continued momentum in Australian and global equities. However, inflation continues to sit well above central bank targets and the Reserve Bank of Australia defied expectations by increasing rates by another 25 basis points in their May meeting, again highlighting the ongoing challenge posed by inflation.

As we head towards the end of the financial year, funds look to be on track to deliver strong absolute returns with an estimated 8.1% return for a Balanced (60-76) option over the financial year to date.

The median growth option rose by an estimated 1.4% over April, while the median capital stable option rose by an estimated 0.7%.

Accumulation returns to April 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 1.2% 3.2% 8.3% 6.0% 7.0% 7.4%
SR50 Capital Stable (20-40) Index 0.7% 2.2% 3.7% 3.3% 4.0% 4.5%
SR50 Growth (77-90) Index 1.4% 3.6% 9.9% 7.0% 8.1% 8.6%

Source: SuperRatings estimates

Pension returns also improved over April with the median balanced pension option rising an estimated 1.3%. Similarly, the median growth pension option is estimated to rise by 1.6%, while the median capital stable pension option gained an estimated 0.7% over the month.

Pension returns to April 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 1.3% 3.4% 9.1% 6.5% 7.7% 8.0%
SR50 Capital Stable (20-40) Index 0.7% 2.3% 4.2% 3.6% 4.4% 4.9%
SR50 Growth (77-90) Index 1.6% 4.4% 11.0% 7.8% 9.0% 9.3%

Source: SuperRatings estimates

“The strong financial year to date return will be welcome news for members after last year’s losses as well as some bumpy months at the start of this financial year. However, these returns and latest inflation figures demonstrate the challenge facing super funds, the economy and everyday Australians. Inflation for the year to March sat at 7%. Most funds over the longer term are targeting a return of inflation plus 3% per annum for their members invested in the balanced option. Put simply, super funds are on track to return around 8% thus far this financial year, despite this also being behind an objective of inflation plus 3%. What it reinforces is that super remains a long term game and that returns are holding up pretty well, despite the challenges that funds and their members are facing to adapt to a higher inflation environment.”, commented Executive Director of SuperRatings, Kirby Rappell.

“We expect to see continuing volatility in returns, despite the strength with which volatility has been navigated to date. Setting long term strategy remains the best approach to long term success. While fund performance may struggle to significantly outpace inflation in the current environment, over the long term they continue to perform well.”

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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

While inflation indicators continue to be closely watched, markets recorded a positive return in March following the slight fall in February, closing the first three months of 2023 on a positive note. Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 0.9% for March and 3.4% for the first three months of the year.

While the Reserve Bank paused their increases to the cash rate in April after 10 consecutive rises, significant uncertainty remains over the direction of the federal funds rate. While markets may anticipate a pause; there has been no pause in volatility as half of the previous 8 months returns were negative, with further volatility remaining the outlook for the remainder of the financial year.

The median growth option also rose by an estimated 0.9% over March, while the median capital stable option rose by an estimated 1.0% for the month.

Accumulation returns to March 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 0.9% 0.6% 8.9% 6.1% 6.9% 7.4%
SR50 Capital Stable (20-40) Index 1.0% 0.9% 3.9% 3.3% 3.9% 4.5%
SR50 Growth (77-90) Index 0.9% 0.6% 10.9% 7.2% 8.0% 8.7%

Source: SuperRatings estimates

Pension accounts provided slightly better returns over the period, with the median balanced pension option rising an estimated 1.1%. The median capital stable pension option is also estimated to have gained 1.2% over the month while the median growth pension option is estimated to rise by a slightly smaller 0.9% for the same period.

Pension returns to March 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 1.1% 0.4% 9.9% 6.6% 7.7% 8.1%
SR50 Capital Stable (20-40) Index 1.2% 1.0% 4.5% 3.7% 4.4% 4.9%
SR50 Growth (77-90) Index 0.9% 0.2% 11.8% 7.9% 8.9% 9.4%

Source: SuperRatings estimates

“Super funds continue to demonstrate their ability to capture upside benefits for members when they are available in the market while managing for market volatility through diversification. As we edge closer to the end of the financial year the outlook feels slightly more stable, although there is still a chance that annual returns could drop back into negative territory depending on the final quarter of the financial year”, commented Executive Director of SuperRatings, Kirby Rappell.

“While there has been significant ups and downs over each month in the year so far, the estimated financial year to 31 March return sits at 6.6%. Superannuation remains a long term investment for most and these shifts also have a much smaller impact when considering 10 year performance. Funds are well equipped to navigate changing markets, with 10 year performance estimated to be 7.4% and demonstrating resilience to date” Mr Rappell added.

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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 has today announced its partnership with InterPrac Financial Planning. Lonsec has been appointed the mandated research provider for InterPrac and has commenced a bespoke onboarding program for all advisers across the InterPrac dealer group. InterPrac advisers join over 4000 financial professionals in Australia using iRate®, Lonsec’s market leading research portal.

iRate® is Lonsec’s award-winning investment research portal, providing financial professionals with access to their range of financial product research, ratings and analytical tools. iRate® is powered by one of Australia’s largest investment research and consulting teams and helps to deliver investment research needs in the one portal. In addition to providing managed fund and super fund research, iRate® also offers portfolio construction and comparison tools that can help advisers streamline their processes and meet their best interest duty and compliance obligations.

Garry Crole, InterPrac Financial Planning Managing Director, comments ‘In our evolving industry, one of our key priorities is working with a research house that has an extensive range of investment and advice solutions. Partnering with Lonsec will help broaden and strengthen the investment research capabilities for all our advisers.’

Lonsec CEO Michael Wright says, ‘In our increasingly compliant-heavy environment, it is more important than ever for licensees to provide efficient and reliable research tools to their advisers.’

‘Qualitative research is at the heart of what we do at Lonsec and we have built iRate® to support the research needs of all Australian advisers. We are delighted to come on board as InterPrac’s new research partner across their entire dealer group and in doing so, assist all of their advisers to have more informed and insightful conversations with their clients.’

In addition to iRate®, Lonsec also supports the evolving needs of licensees and advisers through its investment consulting, tailored portfolios, managed accounts and its dedicated transition consultants who assist practices across the country in transforming their businesses.

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For more information, please contact:

Naomi Christopher
Head of Marketing and PR
Naomi.Christopher@lonsec.com.au
0421 856 260

As markets focus on the persistence of inflation, returns were subdued over the month with leading superannuation research house SuperRatings estimating that the median balanced option generated a return of -0.4% for February.

With the peak in the federal funds rate still uncertain, we expect markets to remain volatile and members should expect further ups and downs in their balances over the coming months. Despite this volatility, we have still seen a modest positive return over the past year.

The median growth option and the median capital stable option also fell by an estimated -0.4% in February, as funds continue to navigate high levels of uncertainty across markets.

Accumulation returns to February 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 -0.4% 0.8% 5.1% 5.8% 7.1% 7.3%
SR50 Capital Stable (20-40) Index -0.4% -0.2% 1.9% 3.1% 3.9% 4.4%
SR50 Growth (77-90) Index -0.4% 1.4% 6.4% 6.7% 8.2% 8.5%

Source: SuperRatings estimates

Pension returns faced a similar moderate fall over February, with the median balanced pension option down an estimated -0.5%. The median capital stable pension option is also estimated to have fallen by -0.5% over the month while the median growth pension option is estimated to fall by a slightly smaller -0.4% for the same period.

Pension returns to February 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 -0.5% 0.6% 5.8% 6.2% 7.9% 8.0%
SR50 Capital Stable (20-40) Index -0.5% 0.0% 2.1% 3.4% 4.3% 4.8%
SR50 Growth (77-90) Index -0.4% 1.2% 6.9% 7.4% 9.2% 9.3%

Source: SuperRatings estimates

“While super funds are estimated to have had negative returns over February, super fund returns remain much less volatile than equity markets. This demonstrates the benefits of diversification and the ability of funds to weather these markets conditions with competitive outcomes for their members.”, commented Executive Director of SuperRatings, Kirby Rappell.

While the response to inflation has been swift, there is a silver lining for those members close to retirement who may have greater reliance on cash returns. Rising interest rates are now flowing back through to member’s cash returns with the SR50 Cash index return rising since May 2022 in line with the RBA cash rate. The chart below displays the monthly and rolling one year return for cash since May 2022.

Cash returns for the month of May 2022 were less than 0.1%, with members seeing an annual return on cash of just 0.2% for the 2022 financial year. This was less than the cash return for January 2023 meaning members would have earned more on their superannuation invested in cash over the month of January than they did for the entire year to June 2022. If we see the current level of cash returns remain, we expect to see outcomes rising quickly towards 4-5%.

“For those members seeking more stability or cash flow to support pension withdrawals, rising cash returns will be a welcome trend; however, cash returns remain materially below the current level of inflation and are unlikely to be of benefit for younger members. We recommend members 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

Leading superannuation research house SuperRatings estimates that the median balanced option generated a return of 3.0% in January, which will be welcome news for members following a disappointing 2022 calendar year.

The continued upward trajectory in interest rates remains a key challenge for the return outlook, with increasing rates either signalling economic resilience or inflationary threats expanding. The positive return pushed estimated financial year to date returns to 6.0% with five months left in the year, which demonstrates the resilience of super during the market volatility that has been experienced.

The median growth option increased by an estimated 3.4% in January, while the median capital stable option delivered a 1.8% return to members.

Accumulation returns to January 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 3.0% 0.0% 4.3% 5.8% 7.1% 7.6%
SR50 Capital Stable (20-40) Index 1.8% -0.4% 1.8% 3.2% 4.0% 4.6%
SR50 Growth (77-90) Index 3.4% 0.6% 5.1% 6.7% 8.2% 8.8%

Source: SuperRatings estimates

Pension returns also rose over January, with the median balanced pension option up an estimated 3.5%. While an increase of 3.9% was estimated for the median growth option and a more modest 2.0% for the median capital stable pension option.

Pension returns to January 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 3.5% 0.2% 4.7% 6.3% 7.9% 8.3%
SR50 Capital Stable (20-40) Index 2.0% -0.4% 2.1% 3.5% 4.4% 4.9%
SR50 Growth (77-90) Index 3.9% -0.5% 5.5% 7.5% 9.1% 9.6%

Source: SuperRatings estimates

“Funds have had a positive start to 2023 and it again underlines the way in which funds have navigated an uncertain market well overall. However, inflation remains high and the Reserve Bank’s commitment to controlling inflation means member balances are likely to see more ups and downs over the coming months.”, commented Executive Director of SuperRatings, Kirby 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

Lonsec Holdings today announces key strategic appointments following the acquisition of Implemented Portfolios Limited in August 2022. Bruce Hawkins joins in the newly created role of Chief Operating Officer, Naomi Christopher is appointed a Head of Marketing and PR across the Lonsec Group and Steve Garth is appointed as Lonsec Product Investment Oversight Committee Chair.

Bruce has over 30 years’ experience in financial services with an extensive track record across investment platforms, superannuation and life insurance. Bruce has held a number of senior positions spanning finance, operations and strategic development with companies including NAB Wealth, Aviva Australia and Xplore Wealth Limited. Prior to joining Lonsec, Bruce was Group Executive – Xplore Wealth at HUB24 Limited leading the Xplore business whilst assisting in its integration into the broader HUB24 business.

Naomi Christopher was most recently National Manager – Marketing and Communications at Implemented Portfolios (IPL) and joined Lonsec Holdings following the acquisition of IPL. Her career in financial services spans 13 years, where she has worked in similar marketing and communications related roles at other financial services businesses such as Midwinter Financial Services (a Bravura owned company) and SQM Research, the funds research and ratings house.

Lonsec CEO and Managing Director of IPL, Mike Wright says “Over the past six months, both the Lonsec and IPL teams have worked tirelessly to understand each business and client groups. I am excited about the growth plans we have for the coming year and the integration of our services to all clients. Bruce has led this integration project and I am delighted that he is joining in a permanent capacity.”

“I am equally delighted that Naomi is taking on the broader Head of Marketing and PR role across the group as she built IPL’s formidable marketing presence” continues Mike.

As part of the integration of the businesses, key Lonsec portfolio managers have been appointed to the IPL Asset Allocation and Investment Committee (AAIC), which is responsible for the investment decisions relating to the IPL portfolios. Lukasz de Pourbaix joined long-standing independent members of the committee post the acquisition of the business by Lonsec in 2022 and will be joined by Nick Field, Associate Portfolio Manager for Lonsec’s listed suite of portfolios. Nick has extensive portfolio management and investment research experience having held various investment research and portfolio management roles for the past 20 years. Nick will provide additional insights and rigour to the AAIC governance process.

Finally, Lonsec has also bolstered its internal portfolio governance framework with the establishment of a group Product Investment Oversight Committee (PIOC). The PIOC is a sub board committee to the Lonsec Board and is responsible for ensuring that the IPL and Lonsec portfolios have the necessary personnel, processes and risk management frameworks in place. Lonsec has appointed Dr Steve Garth as independent chair of the PIOC. Dr Garth brings to the PIOC two decades of experience in key Financial Services roles, including a broad career managing Australian and Global portfolios.

Release ends

For more information, please contact:

Nicci Chaplin
Senior Communications Manager
nicci.chaplin@lonsec.com.au
0402 317 746

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