Resilient sharemarkets drive double-digit returns for super funds

Australian superannuation funds have again generated strong returns for FY25, with the median growth fund returning 10.5 per cent for the year, according to Chant West. 

Super funds have achieved strong returns over FY25 despite volatility from trade tensions and concerns in the Middle East, research from Chant West has revealed.

The median growth fund, comprising 61–80 per cent in growth assets, returned 10.5 per cent for FY25.

Chant West senior investment research manager, Mano Mohankumar, attributed the strong FY25 result to resilient sharemarkets, but also noted that all major asset classes generated positive returns over the period.

“International shares and Australian shares, which have average weightings of about 31 per cent and 24 per cent respectively within a typical growth portfolio, both returned 13.7 per cent,” Mohankumar said.

“Foreign currency was also a meaningful contributor due to the depreciation of the Australian dollar, with the international shares return of 13.7 per cent (reflected in hedged terms) translating to 18.6 per cent in unhedged terms.”

Chant West noted that it was still collecting the final returns for unlisted asset classes, such as unlisted property, unlisted infrastructure, and private equity.

“Infrastructure, which now makes up almost 10 per cent of a typical growth option, as also a key contributor over the year, with returns in the low double digits,” said Mohankumar.

“We estimate that private equity finished with gains in the 8 per cent to 11 per cent range and expect unlisted property, which was in the red in each of the two previous years, to finish with a positive return in the 2 per cent to 5 per cent range.”

Listed real assets were also up over the year, with international listed infrastructure returning an impressive 16.3 per cent, while Australian listed property and international listed property posted gains of 13.7 per cent and 8.4 per cent, respectively.

“Among the traditional defensive asset classes, Australian bonds and international bonds had their best year since FY19, advancing 6.8 per cent and 5.4 per cent, respectively, and cash posted a return of 4.4 per cent,” said Mohankumar.

Mohankumar said President Donald Trump’s latest tariff announcements in recent days were a timely reminder to super fund members that the FY25 experience highlighted the resilience of sharemarkets and importance of maintaining a long-term focus.

“Riding out the storm during periods of shorter-term volatility, far more often than not, is the best course of action,” he said.

According to Chant West, the top three performing growth funds in the year to 30 June 2025 were legalsuper MySuper Balanced at 12.9 per cent, Vanguard Super SaveSmart Growth, and CFS FirstChoice Growth.

Mohankumar warned that while super funds have delivered three straight years of returns of 9 per cent or more, that level of return shouldn’t be thought of as normal.

“The typical long-term return objective for growth funds is to beat inflation by 3.5 per cent p.a., which translates to roughly 6 per cent p.a,” he said.

“Since the introduction of compulsory super, the annualised return is 8 per cent and the annual CPI increase is 2.7 per cent, giving a real return of 5.3% p.a. – well above that 3.5 per cent target.

“Even looking at the past 20 years, which includes three major share market downturns – the GFC in 2007-2009, COVID-19 in 2020 and the high inflation and rising interest rates in 2022 – super funds have returned 7.1 per cent p.a., which is still comfortably ahead of the typical objective.”