Super funds built on their strong start to the new financial year with a 1.3% return in August, with research house Chant West estimating the median Growth fund (61% to 80% growth assets) is up 3.2% over the two-and-a-half months to mid-September.
Once again, shares were the main driver. Australian shares hit a new high after jumping 3.2% in August, on a strong rebound in the resources sector. Developed market international shares rose 2.1% hedged, but just 0.9% unhedged due to the appreciation in the Australian dollar from US64c to US65c. Emerging market shares posted a small loss of 0.4% unhedged over the same period.
Chant West Head of Super Investment Research, Mano Mohankumar, says that despite ongoing uncertainty around where tariffs will land, international shares were supported by a strong US corporate reporting season and expectation of a US interest rate cut at the US Federal Reserve’s September meeting.
Bond returns were also positive, with Australian bonds up 0.3% in August and international bonds up 0.5%.
The table below shows the median performance to the end of August 2025 for the five traditional diversified risk categories.Â
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Super fund performance (results to 31 August 2025)
| Fund category (% growth assets) | 1 mth (%) | 3 mths (%) | FYTD (%) | 1 yr (% per yr) | 3 yrs (% per yr) | 5 yrs (% per yr) | 7 yrs (% per yr) | 10 yrs (% per yr) | 15 yrs (% per yr) |
|---|---|---|---|---|---|---|---|---|---|
| All Growth (96–100%) | 1.7 | 6.3 | 4.2 | 14.9 | 13.0 | 11.2 | 9.2 | 9.6 | 10.0 |
| High Growth (81–95%) | 1.5 | 5.0 | 3.4 | 12.6 | 11.4 | 10.3 | 8.6 | 9.0 | 9.4 |
| Growth (61–80%) | 1.3 | 4.2 | 2.8 | 10.8 | 9.6 | 8.5 | 7.1 | 7.7 | 8.1 |
| Balanced (41–60%) | 1.0 | 3.4 | 2.1 | 8.9 | 7.7 | 6.6 | 5.8 | 6.1 | 6.8 |
| Conservative (21–40%) | 0.7 | 2.4 | 1.4 | 6.9 | 6.0 | 4.6 | 4.3 | 4.5 | 5.3 |
Source: Chant West. Performance is shown net of investment fees and tax, before administration fees and adviser commissions.
As you can see in the table above, returns for all periods from one to 15 years remain positive. And all risk categories have generally met their typical long-term return objectives, which range from CPI (a measure of inflation) + 1.5% for Conservative funds to CPI + 4.25% for All Growth.
The chart below shows performance of the median Growth fund since the introduction of compulsory super in July 1992. Over that period, the median Growth fund has returned 8% per year. The average annual CPI increase over the same period is 2.7%, giving a real return of 5.3% per year – well above the typical 3.5% long-term target. So, while the median Growth fund has delivered returns of 9% or more per year over the past three years, Mohankumar stresses that that level of return shouldn’t be thought of as normal and urges super fund members to think long term.
Even looking at the past 20 years, which includes three major market downturns – the GFC in 2007–09, COVID in 2020, and the 2022 calendar year marked by high inflation and rising interest rates to combat it – the median Growth fund has returned 7.1% per year, comfortably ahead of the typical objective.
Growth funds have produced positive returns in 28 of the past 33 financial years. Mohankumar says the typical risk objective for Growth funds would be no more than six negative returns during that period (there have been just five), so the risk objective has been met as well as the performance objective.
Source: Chant West
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