Top-performing superannuation funds – almost off of them industry funds – produced returns of 8 per cent or more for their members in the 2018/19 financial year, while the median return for all balanced portfolio options was just a little below the long-term average of 7.3 per cent.
Most super funds target a long-term rate of return a few percentage points above the rate of inflation, and last year’s results achieved that.
According to researcher SuperRatings, the top 10 superannuation funds produced an average return of 8.5 per cent in the 2018/19 financial year.
The average balanced option returned 6.9 per cent, compared with the long term average return of 7.3 per cent for balanced options. The average growth option returned 7.4 per cent and the average capital stable option returned 5.3 per cent.
Industry funds dominated the performance table. The top return was UniSuper’s balanced option, which returned 9.9 per cent.
Other funds in the top 10 were QSuper balanced, Media Super balanced, AustralianSuper balanced, Sunsuper for Life balanced, Mercy Super balanced, VicSuper growth, First State Super growth, CSC PSap balanced and MTAA Super.
The top performers over the past 10 years include AustralianSuper, Hostplus, UniSuper Cbus, CareSuper, QSuper, Mercy Super, VicSuper, TelstraSuper and Sunsuper.
SuperRatings executive director Kirby Rappell says: “UniSuper’s ability to provide solid returns over the long term, while protecting their member’ savings against the ups and downs of the market has been the key to its success.”
Mano Mohankumar, senior investment manager at researcher Chant West, says: “Fund members should be very pleased with their 2018/19 returns. It’s better than what most experts predicted a year ago and it’s about 5.5 per cent above the current rate of inflation.
“This is well above the typical super fund long-term objective, which is to beat inflation by 3.5 per cent.”
“It was an interesting year in that all asset sectors produced positive returns and the dispersion of returns across most major sectors wasn’t as wide as it normally is.
“Highlighting this is the fact that QSuper and UniSuper, which were equal top performers in our growth category, achieved that performance with vastly different investment portfolios.
“This supports our view that there is no single best approach to investing. QSuper has a meaningful allocation to unlisted assets such as property, infrastructure and private equity, UniSuper has a strong focus on listed assets and has very little invested in unlisted assets.”