Smaller super funds have outperformed Australia’s biggest funds as strong markets widen performance gaps across the superannuation sector.
Smaller superannuation funds have outperformed Australia’s largest funds across recent Chant West performance data, underscoring how scale alone has not guaranteed top investment outcomes for members.
In a strong recent year for growth assets, several mid-sized and smaller funds delivered returns well ahead of the survey median and the biggest industry players.
legalsuper’s MySuper Balanced option topped the table with a return of 11.5 per cent, followed by NGS Super Diversified (MySuper) at 11.2 per cent and Hostplus Balanced at 10.5 per cent.
By contrast, none of the largest funds by assets appeared in the top two positions, despite a buoyant market environment in which the median growth fund returned 9.3 per cent.
The result capped another robust year for super fund members, extending a powerful three-year run of gains across diversified options.
The median growth fund returned 9.3 per cent in 2025, following gains of 9.9 per cent in 2023 and 11.4 per cent in 2024, leaving members in growth options almost 35 per cent better off over the past three years.
Chant West senior investment research manager Mano Mohankumar said international share markets were the standout driver of returns in 2025.
“International shares in unhedged terms was lower, with a 12.5 per cent return due to the appreciation of the Australian dollar over the year (up from US$0.62 to US$0.67),” he said.
He noted that growth funds, on average, have 31 per cent invested in international shares and 25 per cent in Australian shares, with domestic equities also making a meaningful contribution after returning 10.7 per cent.
“It also helped that all major asset classes generated positive returns over the period,” Mohankumar said.
This strong backdrop amplified the gap between leading smaller funds and the broader industry, with the top performers beating the median by more than two percentage points in 2025.
A separate Chant West table from a more moderate return year shows a similar pattern, with smaller and mid-sized funds again featuring prominently ahead of the largest players.
Hostplus Balanced led that ranking with an 8.7 per cent return, ahead of Australian Retirement Trust Balanced at 8.5 per cent and AustralianSuper Balanced at 8.2 per cent. UniSuper Balanced, Vision Super Balanced Growth and legalsuper MySuper Balanced each posted 8.1 per cent.
HESTA Balanced Growth, Cbus Growth (MySuper) and Aware Super Balanced all returned 8.0 per cent, while Equip Balanced Growth recorded 7.9 per cent. The survey median in that period was around 7.8 per cent.
While the margin over the median was narrower in the softer market year, the tables again show that smaller funds were able to match or exceed the performance of Australia’s largest superannuation providers.
Mohankumar said unlisted assets were also positive, with Chant West estimating unlisted infrastructure delivered gains of between 7 per cent and 10 per cent, while private equity likely finished with a low double-digit return.
Unlisted property, which had been negative in each of the previous two years, was expected to return between 3 per cent and 6 per cent in 2025.
Listed real assets also posted solid gains, with Australian listed property returning 9.7 per cent, international listed property 7.5 per cent and international listed infrastructure 11.6 per cent. Defensive assets were also positive, with cash returning 4 per cent, Australian bonds 3.2 per cent and international bonds 4.4 per cent.
“With share markets performing so well in 2025, particularly international shares, naturally the better performing super funds generally had higher allocations to those asset classes,” Mohankumar said.
Chant West data showed that all diversified risk categories delivered strong one-year outcomes to 31 December 2025, led by All Growth options at 11.6 per cent, High Growth at 10.4 per cent and Growth at 9.3 per cent.
However, Mohankumar cautioned that 2025’s result should not be seen as normal.
“The typical long-term return objective for growth funds is to beat inflation by 3.5 per cent a year, which translates to just over 6 per cent a year,” he said.
He said that since compulsory super began, growth funds have delivered annualised returns of 8 per cent against CPI of 2.7 per cent, producing a real return of 5.3 per cent, well above target.
