POWERED BY MOMENTUM MEDIA
Super funds extend strong start to financial year
Super funds have built on early financial year momentum, as growth funds deliver strong results driven by equities and resilient bonds.
Super funds have continued their strong start to FY26, with the median growth fund (defined as holding 61 to 80 per cent in growth assets) rising by 1.3 per cent in August.
With international share markets also up in September so far, Chant West estimates the median growth fund has gained 3.2 per cent over the first two-and-a-half months of the financial year.
Chant West head of superannuation investment research, Mano Mohankumar, said listed share markets, the main drivers of growth fund performance, have delivered positive results.
“Australian shares reached new highs after advancing 3.2 per cent over the month, buoyed by a strong rebound from the resources sector.”
Mohankumar stated that despite continued tariff uncertainty, international shares also showed strong performance, supported by a “robust” US earnings season, and elevated expectations of a Federal Reserve rate cut.
“Developed market international shares gained 2.1 per cent in hedged terms, but the appreciation of the Australian dollar – up from US$0.64 to US$0.65 – limited the return to 0.9 per cent in unhedged terms,” he added.
“Emerging markets shares underperformed developed markets with a small loss of 0.4 per cent in unhedged terms. Over the same period, Australian and international bonds posted gains of 0.3 per cent and 0.5 per cent, respectively.”
Data from Chant West’s super fund performance survey show that diversified risk categories, ranging from all growth to conservative, have generally met their long-term objectives.
These typically range from CPI plus 1.5 per cent for conservative funds to CPI plus 4.25 per cent for all growth strategies.
Mohankumar emphasised that superannuation should always be viewed as a long-term investment.
With MySuper products now operating for just over eleven years, Mohankumar noted that “since the introduction of compulsory super in July 1992, the median growth fund has returned 8 per cent per annum”.
Over the same period, the annual CPI increase is 2.7 per cent, which has given a real return of 5.3 per cent per annum, above the usual 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 per annum, which is still comfortably ahead of the typical objective,” Mohankumar said.
Moreover, the median growth fund has generally outperformed the ten-year return objective, in line with superannuation’s long-term horizon, according to Chant West.
Mohankumar noted that the only expectations came in the years following the GFC, when funds lost around 26 per cent over a 16-month period between October 2007 and February 2009, which saw returns drag below target until late 2017.
AUTHOR
Adrian Suljanovic
Recommended for you
The super fund has announced that Mark Rider will step down from his position of chief investment officer (CIO) after deciding to “semi-retire” from full-time work.
Rest has joined forces with alternative asset manager Blue Owl Capital, co-investing in a real estate trust, with the aim of capitalising on systemic changes in debt financing.
The Future Fund’s CIO Ben Samild has announced his resignation, with his deputy to assume the role of interim CIO.
The fund has unveiled reforms to streamline death benefit payments, cut processing times, and reduce complexity.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
76.97 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
76.46 3 y p.a(%)
3
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
51.13 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
45.15 3 y p.a(%)
5
Select Baker steel Gold Institutional
43.78 3 y p.a(%)
