Best performing pension funds: Balanced category (41–60%)

In the short term, investment options in the Balanced risk category may experience more volatility than a Conservative-style investment but less volatility than a Growth-style investment.

In the long term, a Balanced-style investment option will generally grow more than a Conservative-style investment option but not as much as a Growth-style investment option.

Top 10 Balanced investment options (pension funds): 1 year to December 2020

Source: Chant West. The top 10 is limited to Balanced options with assets of $1 billion or more. Performance is shown net of investment fees and tax, and before administration and adviser commissions.

• Pension fund rankings: All Growth category (96–100%)
• Pension fund rankings: High Growth category (81–95%)
• Pension fund rankings: Growth category (61–80%)
• Pension fund rankings: Balanced category (41–60%)
• Pension fund rankings: Conservative category (21–40%)

2020 was a roller coaster year for superannuation and the global economy in general, but the median 1 year return for Balanced investment options across the board was 3.3%.

Below you can find the top 10 performing Balanced investment options over 1 year to June 2020. Click the arrow to see the top 10, or continue reading to discover the top 10 performing Balanced investment options over 10 years.

Playing the long game

It’s important to keep an eye on how your pension is performing for you year to year (and interesting to see how other funds have performed), but for most people, superannuation will be the longest-held investment we ever have, and our lens on super should reflect that. 

Longer-term figures are more significant because they incorporate the ups and downs over that entire period, and allow us to see which investment managers can consistently deliver superior performance, regardless of changing external conditions. 

Top 10 Balanced investment options (pension funds): 10 years to December 2020

Source: Chant West. The top 10 is limited to Balanced options with assets of $1 billion or more. Performance is shown net of investment fees and tax, and before administration and adviser commissions.

Again median figures can provide good context. In the ten-year period to December 2020, Balanced investment options as a category delivered a median return of 7.5%. 

A small difference in performance makes a big difference over time

Although the difference between the top performer and the median may not seem that significant (1.1% per year), the difference builds up significantly over time due to compounding. We have developed the SuperGuide Super fees and returns calculator to help readers understand the difference the fees they pay and projected returns may make over time.

For example, for a 67-year-old with $500,000 in super achieving 8.6% per year, their super balance would grow to approximately $1,123,415 by age 85 (assuming 0.8% in fees and not withdrawing any super) .

All other things being equal, achieving 7.5% instead would mean a super balance of approximately $928,745 – a difference of $196,671, or approximately 17% less.

But don’t forget sequencing risk

When you are nearing or in retirement it is important to allow for sequencing risk, particularly if you need to draw down a significant part of your super balance.