Super funds rise as global markets gain ground

Australian super funds have posted early gains in FY26, driven by strong share market performance and resilient long-term returns.

Super funds have started the 2025–26 financial year strongly, after returning 10.4 per cent over FY25.

The median growth fund, which typically holds 61–80 per cent in growth assets, rose by 1.5 per cent in July, and with share markets also rising in August, Chant West has estimated the median growth fund is up 2.7 per cent in the first seven weeks of FY26.

Head of super investment research at Chant West, Mano Mohankumar, said global share markets have gained ground in July, assisted by progress on US trade negotiations.

“During the month, the House of Representatives passed the One Big Beautiful Bill Act (US President Donald Trump’s core tax and spending policies), which reduced some policy uncertainty,” he said.

“Healthy US corporate earnings results, particularly from most of the mega-cap technology companies, also supported share markets. While geopolitical risks remain, markets largely looked through the ongoing conflict in Ukraine and the Middle East.” 

According to Chant West, developed international shares advanced 2 per cent in hedged terms in July. A fall in the AUD from US$0.65 to US$0.64 lifted unhedged returns to 3.1 per cent.

Meanwhile, emerging markets performed better, returning 3.8 per cent in unhedged terms, while Australian shares rose 2.4 per cent and international bonds were flat, at 0 per cent and -0.2 per cent, respectively.

Chant West’s data further showed that all traditional diversified risk categories – from conservative to all growth – have generally met their long-term return objectives.

These typically range from CPI plus 1.5 per cent for conservative funds to CPI plus 4.25 per cent for all growth.

Mohankumar further stated superannuation performance must always be viewed through a long-term lens, given that MySuper products have now been operating for over a decade.

“Since the introduction of compulsory super in July 1992, the median growth fund has returned 8 per cent per annum. The annual CPI increase over the same period is 2.7 per cent, giving a real return of 5.3 per cent per annum – well above the typical 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 per cent per annum, which is still comfortably ahead of the typical objective,” Mohankumar said.

Preceding this, Kirby Rappell, director of SuperRatings, warned that the outlook for FY26 remains uncertain despite the financial year’s positive start, due to the current strength of valuations and lingering global worries, which has the potential to “drive changes in Australia’s superannuation returns”.