Australian superannuation funds have had a pretty stellar run in recent months, notching up seven months on the trot of positive gains, before a slight dip in November.
And new figures released by superannuation research house Chant West this week suggest that Australians don't have too much to worry about regarding their superannuation performance over the calendar year, with the falls in November only amounting to about 0.4%.
As Chant West said:
Despite the small loss, and taking into consideration market movements over December so far, with less than two weeks of the year remaining, Chant West estimates that the median growth fund return for calendar year 2025 is sitting at a healthy 8.5%.
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A good result in trying times
Chant West, head of Superannuation Investment, Mano Mohankumar, said, considering the uncertain global political and economic times we've been living through over the past year, that would be an excellent result.
Mr Mohankumar noted that offshore markets were driving many of the gains:
International share markets, which account for just over 30% of growth fund allocations on average, have been the primary driver of the strong CY25 performance to date, delivering over 17% so far this year. It's also helped that all major asset classes have produced positive returns for the year to date. Given the strength of international share markets, super fund members who were invested in higher risk portfolios would have naturally experienced even stronger outcomes.
Mr Mohankumar said this year's result would build on solid performances for the past two calendar years of 9.9% in 2023 and 11.4% in 2024, bringing gains to about 33% over the three years.
He said further:
While the calendar year performance often attracts the most attention at this time of year, it's important to remember that long-term performance remains the key measure for super outcomes.
Strong performance over longer term
Looking further back through historical figures, Chant West noted that since the introduction of mandatory superannuation in 1992, the median growth fund had returned 8% per annum.
The research house said further:
The annual consumer price index increase over the same period was 2.7%, giving a real return of 5.3% p.a. – well above the typical 3.5% 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 7% p.a., which is still comfortably ahead of the typical objective.
Mr Mohankumar said there had only been five negative years in total over that entire period, "which translates to less than one year in every six''.
The Association of Super Funds Australia (ASFA) recently estimated that to achieve a "comfortable" retirement at age 67, couples needed a superannuation balance of $690,000, while singles would need $595,000.
