In this article you can discover the investment performance for 12 different asset classes over various timeframes. For all asset classes there is data for up to 10 years, and for most asset classes there is also data for 15 financial years.
Note: A financial year covers 1 July to 30 June the following year, whereas a calendar year covers 1 January to 31 December. If you are looking for asset sector performance over calendar years see SuperGuide article Asset sector performance: Returns over 1 to 15 calendar years (to December 2019).
We are grateful to Chant West for providing this information because it can assist readers to better understand the short-term and long-term performance of different assets over time. This can help with the selection of investment options for your super fund or in determining your investment strategy if you have an SMSF.
In the table below you can find asset sector performance over 1 to 15 years to June 30, 2020.
Asset Sector Performance (results to 30 June 2020)
What a difference a year makes. The top performers over the last financial year were International Shares (up 3.6% hedged and 5.2% unhedged) and Australian and International Bonds (up 4.2% and 5.2% respectively). The previous year’s rooster, listed property, was this year’s feather duster. Australian Listed Property fell 20.7% while International Listed Property was down 17.6%.
Unlisted property, which many big funds invest in diversify away from more volatile listed markets, was down a more modest 2.1%. Unlisted retail property fared much worse than the commercial and industrial sectors, with values typically down 15% to 20% due to the effects of COVID-19 on consumer sentiment and the shift to online commerce.
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A similar pattern was evident in infrastructure. While global listed infrastructure fell 9.6%, unlisted infrastructure managed a 0.9% increase.
Defensive assets played the role they were designed for, that is, to provide diversification and smooth out returns. As mentioned above, Australian Bonds and International Bonds both performed well in a difficult year.
Although with interest rates at record lows, cash investments barely kept their head above water with a return of 0.8%.
While short-term returns make headlines, with super it is performance over the long run that counts. Over a 10-year period, International Shares (up 12.4% unhedged), Global Listed Infrastructure (up 11.4% hedged) and Private Equity (up 11.2%) were the standout asset classes. All other asset classes achieved returns above 5.5% except for Cash which averaged 2.7% a year.
Over a 15-year period the impact of the GFC and now COVID is clear. While Australian and International share provided the best returns, as you would expect over the long term, the average annual return was constrained although well above inflation. The average annual return of International shares was 7.3% (unhedged) and 6.6% (hedged), while Australian shares were also up 6.6%. International Bonds also performed strongly with an average annual return of 6.4%.
|Asset sector||1 yr (%)||3 yrs (% per yr)||5 yrs (% per yr)||7 yrs (% per yr)||10 yrs (% per yr)||15 yrs (% per yr)|
|International Shares (Hedged)||3.6||6.9||7.2||9.4||10.5||6.6|
|International Shares (Unhedged)||5.2||10.8||9.4||13.0||12.4||7.3|
|Australian Listed Property||-20.7||2.3||4.7||7.7||9.4||3.1|
|Global Listed Property||-17.6||-1.9||1.6||4.4||8.1||5.0|
|Global Listed Infrastructure (Hedged)||-9.6||2.7||6.3||8.8||11.4||–|
|International Bonds (Hedged)||5.2||4.7||4.8||5.3||6.0||6.4|
Source: Chant West
Note: The table shows the performance of all the main asset sectors over different time periods to the end of June 2020. Chant West have used market indices for all sectors other than private equity and infrastructure. For those sectors, for which no indices exist, they have used the returns of a major fund in our survey that are representative of those markets.
To see asset sector performance across for the past 4 financial and calendar years across various timeframes, see SuperGuide’s Asset Sector Performance Reckoner.