Super returns tick towards better-than-expected FY24 return

Latest figures from Chant West suggest a median growth fund return of around 9 per cent by the end of the financial year 2024, with the median growth fund rising 0.9 per cent in May.

The all-growth option (96–100 per cent growth assets) and the high growth option (81–95 per cent) also grew 1.1 per cent each over the month.

Meanwhile, while more muted, the balanced option (41–60 per cent) hiked up by 0.8 per cent and the conservative option (21–40 per cent) rose by 0.6 per cent.

With just a week left in June, Mano Mohankumar, senior investment research manager at Chant West, described a final result close to 9 per cent for FY24 as an “excellent outcome”, pointing to all the uncertainty simmering around inflation, interest rates, and ongoing geopolitical tensions.

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This week, the Reserve Bank of Australia (RBA) left the cash rate unchanged at 4.35 per cent for the fifth consecutive time but reiterated that it can’t rule anything “in or out” in light of recent strong jobs and inflation data.

However, Mohankumar maintained that this year’s result follows a return of 9.2 per cent in FY23, which was also better than expected.

“The experience over the past two years is another reminder of the importance of remaining patient and not getting distracted by shorter-term noise,” he said.

He observed that, thinking back to FY22, the financial year closed with sharp losses over the June quarter amid surging inflation and uncertainty as to when interest rate rises might come to an end.

“At that time, very few could have foreseen a return of 19 per cent over the subsequent two years,” Mohankumar said.

“More importantly, super funds continue to meet their long-term return and risk objectives.”

Previously, markets saw a sharp pullback in April, ending a six-month streak as the median growth fund declined 1.7 per cent for the first time since October 2023.

At the time, Mohankumar outlined the silver lining of a “health return” for FY24, despite all the macro uncertainty, of just under 10 per cent.