Australian super funds have continued to consistently post strong performance over the past decade, with a new report from financial and superannuation advice firm Chant West revealing the average yearly growth for Australian super funds since June 2009 is sitting at 9%.
The company praised the significant growth as “excellent” in its most recent report, saying it was the best sequential growth in Australian super funds since 1993 to 2oo1, and well above what experts and analysts had predicted.
“This year’s 9.2% is better than most experts, including ourselves, expected a year ago,” Chant West senior investment manager Mano Mohankumar said.
Coming out on top over the past 10 years for balanced funds was superannuation fund UniSuper Balanced, reporting a 7.5% return per annum. Following that was CareSuper Balanced, Rest Core, and Equip Balanced Growth, which all reported similar returns around 7.5%.
However, the most impressive performance came from super funds in the year ending June 30, with numerous Australian funds posting double-digit growth for one-year returns. At the top of the list and over 1% ahead of its nearest competitor is hospitality, tourism, recreation and sport industry super fund Hostplus.
Interestingly, no retail funds appeared in the top 10 for either one-year returns or ten-year returns, something Mohankumar puts down to vigilance when it comes to investment allocation and management.
“Over the longer term industry funds, as a group, have outperformed retail funds largely because of the way they have allocated their investments and their preparedness to vary those allocations to suit changing market conditions,” he said.
“Specifically, they have always tended to have higher allocations to unlisted assets such as private equity, unlisted property and unlisted infrastructure (currently 21% versus 5%), which have performed well for them.
According to Chant West, industry funds were ahead between 0.6% and 1.6% per annum.
“Over the longest period we can measure Australia’s major super funds have delivered on their promises to members, growing their wealth in real terms while protecting them from undue risk. That’s an achievement the funds should be proud of, and they should be making sure their members are aware of it, too,” Mohankumar said.