Super funds have delivered another robust year for members, extending a powerful three-year stretch of gains across diversified options.
Super funds have capped another strong calendar year for members, with the median growth fund returning 9.3 per cent in 2025, reinforcing a three-year run of robust performance.
The result followed 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. Those in higher-risk portfolios recorded even stronger outcomes.
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.
Unlisted assets were also in positive territory, with Chant West still finalising results across property, infrastructure and private equity.
“We estimate that unlisted infrastructure finished with gains in the 7 per cent to 10 per cent range, with private equity likely to finish with a low double-digit return,” he said.
He added that 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 delivered 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.
He added that funds with lower exposure to unlisted property, cash, bonds and the US dollar also tended to benefit from market conditions.
Chant West data showed that all diversified risk categories delivered strong one-year outcomes to 31 December 2025.
All Growth options returned 11.6 per cent, High Growth 10.4 per cent, Growth 9.3 per cent, Balanced 7.8 per cent and Conservative 6.2 per cent. Over the long term, all categories have met their typical return objectives.
Mohankumar cautioned that 2025’s result should not be seen as normal however.
“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.
“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 6.9 per cent a year, which is still comfortably ahead of the typical objective,” Mohankumar said.
He said risk objectives had also been met.
“Risk is normally expressed as the likelihood of a negative annual return, and typically a growth fund would aim to post no more than one negative return in five years on average,” he said.
“As it turns out, there have only been five, so the risk objective has been met as well as the performance objective.”
Chant West data also showed that over rolling 10-year periods, the median growth fund has exceeded its return objective for most of the time since compulsory super began, with only two exceptions between mid-2008 and late-2017 following the Global Financial Crisis.
