POWERED BY MOMENTUM MEDIA
Resilient portfolios drive double-digit gains for Mercer Super
Despite geopolitical headwinds driving market volatility, Mercer Super has announced a “solid outcome” for the financial year.
In a statement on Tuesday, Mercer Super said its Mercer SmartPath, its default investment option, has returned between 12.3 per cent and 12.6 per cent for the 2024–25 financial year across age-based cohorts for members aged between 18 and 52.
Over the long term (10 years), returns for default members aged between 18 and 52 were between 7.8 per cent p.a. and 8.1 per cent p.a., while midterm returns (five years) for default members aged between 18 and 52 were between 9.7 per cent p.a. and 10.3 per cent p.a.
The fund’s chief investment officer Graeme Miller said the results demonstrate consistent growth in members’ retirement wealth and showcase the resilience of well-diversified investment portfolios.
“Despite geopolitical headwinds driving market volatility, we delivered a solid outcome for the financial year. This should give members confidence as we manage the challenges to come,” Miller said.
He explained that in response to the evolving economic outlook, the fund moderately reduced its exposure to equities in order to “manager short term fluctuations”.
“We remained confident in our long-term strategy, drawn from our global research capabilities, and did not make any changes to our strategic allocations,” Miller said.
“As we look ahead and with a view of super as a long-term investment, we’ll continue to focus on having well-diversified investment portfolios that are prudently managed across many different countries, industries and investment types to support portfolio resilience in an uncertain economic environment.”
Overall, Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over FY24–25, but an economist warned that the rally may be harder to sustain as key risks gather pace.
Namely, SuperRatings estimated the median balanced super option returned 1.4 per cent in June, lifting the financial year gain to 10.1 per cent – a result shaped by strong early momentum followed by heightened volatility as Donald Trump returned to the US presidency.
However, while AMP chief economist Shane Oliver said the latest returns underscored how markets have once again defied expectations, he flagged several risks that could ultimately result in lower returns of 6–7 per cent over the next 12 months.
Recommended for you
Large superannuation accounts may need to find funds outside their accounts or take the extreme step of selling non-liquid assets under the proposed $3 million super tax legislation, according to new analysis from ANU.
Economists have been left scrambling to recalibrate after the Reserve Bank wrong-footed markets on Tuesday, holding the cash rate steady despite widespread expectations of a cut.
A new Roy Morgan report has found retail super funds had the largest increase in customer satisfaction in the last year, but its record-high rating still lags other super categories.
In a sharp rebuke to market expectations, the Reserve Bank held the cash rate steady at 3.85 per cent on Tuesday, defying near-unanimous forecasts of a cut and signalling a more cautious approach to further easing.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
99.46 3 y p.a(%)
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
