Superannuation funds have delivered positive returns for the first month of the calendar year, Chant West says, despite volatility in the markets.
Chant West, head of superannuation investment research, Mano Mohankumar, said funds were coming off a strong return for calendar year 2025 of 9.2%, and edged up another 0.4% for January.
This brought the return for the first seven months of the financial year to 5.4%.
Mr Mohankumar added:
During the month, we saw heightened geopolitical risks including US military action in Venezuela and renewed tariff threats against Europe in relation to Greenland, which were subsequently withdrawn. However, markets focused on the global economic backdrop that still remains positive and expectations of continued earnings growth. Over the full month of January, international developed shares were up 1.7% in hedged terms, but the sharp appreciation of the Australian dollar relative to the US dollar turned that healthy gain into a loss of 2.7% in unhedged terms. On average, super funds have about 70% of their international shares exposure unhedged. Emerging markets shares outperformed developed markets, returning 3.6% in unhedged terms. Back at home, Australian shares advanced 1.7%, while over the same period both Australian and international bonds gained 0.2%
Mr Mohankumar said that over a longer time horizon, it was clear that Australia's superannuation funds had been performing well.
He added:
Since the introduction of compulsory super in July 1992, the median growth fund has returned 8% p.a. The annual CPI increase over the same period is 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 6.8% p.a., which is still well ahead of the typical objective.
Diving deeper into the results, over the past year, an aggressive "all growth" allocation has outperformed, returning 8.7% compared with 6.3% for the balanced option.
Over the financial year to date, all growth has also outperformed, coming in with a 7.2% return.
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So how much super do you need?
The Association of Superannuation Funds of Australia (ASFA) has done the numbers and says that, for a comfortable lifestyle, singles will need a super balance of $54,240 a year, or $76,505 for a couple.
This translates to a super balance of $690,000 for couples and $595,000 for singles based on a retirement age of 67.
