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Home / Super funds / Super fund average returns

Pension fund performance to September 2020

August 7, 2020 by Barbara Drury Leave a Comment

Reading time: 3 minutes

The bounceback in superannuation pension funds, like accumulation funds, continued in the September quarter 2020, albeit at a less exuberant pace than in the June quarter.

Although funds have not quite recovered to levels prior to the steep COVID-linked sell-off in February this year, the positive momentum has continued in October and November. Sharemarkets tend to be forward looking and local shares have been buoyed by an easing of lockdown restrictions, optimism about progress towards a vaccine and unprecedented levels of economic stimulus in the October federal Budget.

The median pension Growth fund (with 61-80% growth assets) was up 2.3% in the September quarter following a 7.3% jump in the preceding June quarter. This trimmed the loss over the 12 months to September to -0.2%, largely on the back of the strong recovery in Australian and global shares.

As you would expect in the circumstances, the higher the level of growth assets the bigger the recovery over the three months to September and the bigger the deficit over 12 months. The median All Growth option was up 2.9% over the September quarter but still down -1.7% over the year to September. Conversely, fund members in the Conservative option (21-40% growth assets) enjoyed a positive median return of 1.4% for the quarter and 0.7% for the year to September.

While most retirees would have seen their account balance fall over the past year after withdrawing the mandated minimum pension income, the Government’s move to temporarily halve the minimum withdrawal would have softened the blow somewhat.

Pension fund categories – Conservative, Balanced, Growth, High Growth and All Growth – are the same as those for accumulation funds and by and large hold the same underlying investments. So, pension fund returns are driven by the same factors as accumulation fund returns.

Are you with a top performing super fund?

Click here to compare more than 90 Australian super funds, including returns, fees, features, awards and more.

For more on the underlying market trends and asset class returns see SuperGuide article Super fund performance over 28 financial years to June 2020.


Despite holding the same underlying investments, pension fund returns tend to be roughly 10–15% higher than returns for the same category in accumulation phase over the long run. The difference is due largely to tax, as investment earnings are not taxed in retirement phase.

For example, in the 15 years to September 30, pension Growth funds returned 6.8% per year on average while accumulation Growth funds returned 6.14% a year.

However, when returns are negative pension funds typically generate slightly bigger losses than accumulation funds in the same category. Chant West senior research manager, Mano Mohankumar says this is because accumulation funds get a deferred tax benefit when returns are negative.

For example, pension All Growth funds with 96-100% growth assets returned -2.3% in the year to June 30,  while the median All Growth fund in accumulation phase with a near identical investment portfolio returned a slightly smaller loss of -2.1%. But three months later, pension All Growth funds returned -1.7% in the year to September 30 compared with a slightly bigger loss of -1.8% for All Growth accumulation funds. For all other categories, pension returns were higher than the accumulation fund equivalent.

Mohankumar says although people tend to be more risk averse as they get older, most retirees are still invested in their fund’s Growth option where the majority of accumulation members are also invested. For example, he says that in large industry funds such as AustralianSuper and UniSuper most pension fund members are in their Balanced option (with an investment mix that aligns with Chant West’s Growth category). Even so, he says a meaningful number would also be invested in the next risk category down, in line with Chant West’s Balanced category with 41–60% growth assets.

However, retirees in retail pension funds (and some industry pension funds) are most likely to be invested in a Lifecycle investment option with a conservative investment mix. Lifecycle funds automatically shift members into a lower risk investment mix as they age and get closer to retirement.

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In years when shares and listed property perform poorly, retirees with a more conservative investment mix will do better than those with a higher exposure to growth assets.  Over the long term though, the advantages of holding a meaningful level of growth assets is clear, as can be seen in the table below.

The following table from Chant West shows pension fund performance across various timeframes for five investment categories as at the end of September 30.

Pension diversified fund performance (results to 30 September 2020)

Fund categoryGrowth assets (%)3 mths (%)1 yr (%)3 yrs (% per yr)5 yrs (% per yr)7 yrs (% per yr)10 yrs (% per yr)15 yrs (% per yr)
All Growth96–1002.9-1.76.98.68.79.27.2
High Growth81–952.8-1.06.68.68.99.57.2
Growth61–802.3-0.26.17.78.08.56.8
Balanced41–601.70.15.36.26.57.16.2
Conservative21–401.40.74.45.15.56.25.0

Note: Performance is shown net of investment fees. It is before administration fees and adviser commissions.

If you are interested in seeing how your pension fund has performed compared to it’s peers, see the following SuperGuide articles:

  • 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%)

Are you with a top performing super fund?

Click here to compare more than 90 Australian super funds, including returns, fees, features, awards and more.

Learn more about super fund performance in the following SuperGuide articles:

Monthly super fund performance Reckoner: Monthly returns for 5 investment categories

January 19, 2021

Super fund performance over 28 calendar years (to December 2020)

January 19, 2021

Annual super fund performance Reckoner: Annual returns for 5 investment categories

January 19, 2021

Super fund performance: Monthly returns to December 2020

January 19, 2021

What are lifecycle super funds, and how do they perform?

September 16, 2020

Superannuation funds: Does size really matter?

June 3, 2019

Fund Performance: SMSFs vs APRA super funds

May 7, 2019

Learn more about the best performing pension funds in the following SuperGuide articles:

Best performing pension funds: All Growth category (96–100%)

August 6, 2020

Best performing pension funds: High Growth category (81–95%)

August 6, 2020

Best performing pension funds: Growth category (61–80%)

August 6, 2020

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

August 6, 2020

Best performing pension funds: Conservative category (21–40%)

August 6, 2020

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All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs.

You should consider whether any information on SuperGuide is appropriate to you before acting on it.

If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

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