Super funds break record with tenth year of positive returns

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Superannuation funds have made it to a record-breaking tenth consecutive year of positive investment returns.

According to Chant West, the ‘median growth fund’, with 61%-80% in growth assets and representing the fund most Australians have, was up 7% for the 2018/19 financial year.

Chant West senior investment manager Mano Mohankumar said super fund members should be “very pleased” with this return.

“It’s better than what most experts predicted a year ago and it’s about 5.5% above the current rate of inflation – well above the typical long-term objective which is to beat inflation by 3.5%.”

While the return in 2018/19 is down compared to recent years – the average over the whole 10 year period was 8.8% a year – it is still a “tremendous run”. Though, in part, it is a recovery from the GFC.

“So it would be a mistake to assume that the level of returns we’ve seen recently is sustainable. Indeed, with many asset sectors looking to be fully valued or close to it, we’re expecting some challenging times ahead.”

The median growth fund was up 2.3% in May 2019.

SuperRatings also found a 2.3% return for the ‘median balanced option’ in June.

“While funds have ridden the wave of market fluctuations since the Global Financial Crisis, the FY19 financial year has nevertheless proved a fitting bookend to super performance over the past decade, during which the superannuation system has amassed an additional $1.3 trillion for members,” said SuperRatings.

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1 comment

  1. And people are complaining about the deeming rate of 3% for the Aged Pension calculations?

    Let’s hope they don’t actually include your real income from investments?

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