Super funds have delivered a fourth consecutive year of strong returns despite one of the most volatile years in recent memory, with the median balanced option estimated to have returned 9.1 per cent for the 2025-26 financial year.
New estimates from SuperRatings show international equities once again powered member returns, helping funds rebound from sharp market falls earlier in the year triggered geopolitical upheaval.
The recovery gathered pace in the final quarter of the financial year as conditions in the Middle East stabilised and investor enthusiasm for AI accelerated.
The research house had previously expressed doubt at the start of the fourth quarter whether positive performance could be achieved.
“With just one quarter remaining in the financial year, the pathway for funds to once again outperform their long-term average is narrowing,” it said in April.
Technology infrastructure, semiconductor, storage and hardware manufacturers supplying the AI sector were among the strongest-performing stocks.
During the financial year, the median growth option returned an estimated 10.6 per cent, while capital stable options delivered 5.9 per cent. Meanwhile, pension members also benefited, with the median balanced pension option returning an estimated 10.2 per cent.
Although the final result was strong, investors endured significant swings throughout the year. In the nine months to 31 March 2026, the median balanced option had returned just 2.8 per cent before a strong rally in global equity markets lifted returns over the closing months of the financial year.
Kirby Rappell, director of SuperRatings, said this year was “characterised by considerable market volatility”, particularly as the outbreak of the US-Iran war placed pressure on fund performance.
“However, we once again saw the benefits of staying the course, as funds delivered strong performance to close out the financial year.”
The month of June added to the strong finish, with the median balanced option estimated to have gained 1.2 per cent during the month, while growth and capital stable options returned 1.3 per cent and 0.9 per cent respectively.
SuperRatings said AI-related technology infrastructure and hardware manufacturers replaced the traditional “Magnificent Seven” technology stocks as the market’s standout performers.
Australian equities lagged their global counterparts, with the ASX 200 returning 2.8 per cent compared with more than 20 per cent for the S&P 500.
Gains in mining and commodity stocks were offset by weakness in the banking sector, with CBA and NAB shares ending the financial year below where they began.
Despite geopolitical tensions and tariff uncertainty, members who remained invested continued to benefit from long-term investing. SuperRatings estimated the median balanced option returned 13.4 per cent between 1 January 2025 and 30 June 2026.
“Looking ahead there remains uncertainty around market performance over the next 12 months, including whether anticipated productivity gains from AI will translate into economic and corporate growth.
“In Australia, persistent inflation remains a concern, with recent RBA rate increases underscoring the ongoing challenge. If inflationary pressures persist, they could act as a headwind for Australian markets and investment returns,” Rappell said.
The research house estimated the average annual return since the inception of Australia’s superannuation system stands at 7.3 per cent, with the typical balanced fund continuing to exceed its long-term return objective of CPI plus 3.0 per cent.
“It’s been another incredible year for the retirement balances of Australians,” said Rappell. “However, with uncertainty lingering and markets sitting at or near record highs, investors should continue to expect volatile returns and temper their enthusiasm for similarly strong performance over coming years.”
