Superannuation

“Growth” super fund options delivered stellar returns in 2017, while DIY funds pool grows: Here are the top 10 growth funds

Emma Koehn /

In 2017 growth super funds delivered some of the best returns for retirement savings since the 1990s, but while recent data has suggested traditional funds have outperformed DIY super, there’s still plenty of Australian’s flocking to the manage their own superannuation accounts.

ChantWest’s annual review of superannuation in Australia confirmed other reports that 2017 marked an out-of-the-ordinary year for returns. The median return for a growth fund over the past 12 months has been 10.8%, with those at the research house indicating that a choice to allocate a majority of assets towards “growth” opportunities paid off for many fund holders.

However, with the local equities market powering these returns forward, retirement savers are warned to consider both their goals for returns and risk profiles for their accounts over a much longer time frame than one year.

“By all means look at what your fund delivered last year, but what’s really important is to know what its long-term objectives are and whether it’s achieving them. Typically, you’ll find that your fund is aiming to beat inflation by three percent to four percent a year over rolling five year periods,” ChantWest founder Warren Chant said in a statement on the report this week. 

Small business owners are consistently warned they tend not to think in as much detail as they should about retirement planning. 

However, the many small business owners interested in the DIY super space have been reminded that managing your own accounts might make it harder to keep pace with the currently strong retail fund offerings.

That challenge doesn’t seem to have put Australians off self-managed superannuation, though, with recent DIY fund statistics from the Australian Taxation Office suggesting the pool of funds has significantly increased over the past five years.

“The annual statistics highlight the growth of the SMSF sector. In the five years to 2016–17 we have seen the number of SMSFs grow by 26% to 597,000, with total assets worth $697 billion,” ATO assistant commissioner Kasey Macfarlane said in a statement. Self-managed super now makes up one third of all retirement assets.

When it comes to what retirement savers are actually investing in through do-it-yourself funds, cash and Australian shares still make up the majority of assets.

One quarter of DIY fund assets were in cash and term deposits in 2016, with 29.5% held as Australian equities.

Many of those in the self-managed super space have spent the past 12 months getting across new rules for superannuation that came into effect after the Turnbull government announced reforms two years ago. 

With these now in effect, the tax office confirmed it will extend the deadline for self-managed super fund returns for the 2016-17 financial year until June 30, 2018, to recognise that there are “some major new considerations and decisions for SMSFs and their advisers”, ATO deputy commissioner James O’Halloran said in a statement.

For traditional fund holders, the ChantWest report reminds retirement savers there are a few key reasons returns were so strong last year, reminding investors that asset classes perform differently each year.

Over the past 12 months, hedged international shares returned 18.7%, while local equities returned 11.9%, both of which powered super forward.

Top 10 performing growth super funds (one year to December 2017):

1. Australian Super – Balanced – 13.6% return

2. AustSafe MySuper – Balanced – 13.5%

3. Hostplus – Balanced – 13.4%

4. Club Plus MySuper Balanced – 12.9%

5. Intrust Balanced – 12.8%

6. Kinetic Super Growth – 12.7%

7. First State Super Growth – 12.6%

8. Cbus Growth (Cbus MySuper) – 12.1%

9. SunSuper Balanced – 12%

10. Unisuper Balanced – 12%

Source: ChantWest

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Emma Koehn

Emma Koehn is SmartCompany's senior journalist.

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