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Despite rising Middle East tensions, super funds continued to deliver strong returns in February, with the median Growth fund (61% to 80% growth assets) up 1.1% over the month and 6.5% for the year to February 28.
However, as war with Iran escalated and the disruption to oil supplies pushed global oil prices and inflation higher, markets buckled. Chant West estimates the median Growth fund is down 3.8% in March so far, reducing the return for the financial year to date to about 2.5%.
Chant West head of superannuation investment research, Mano Mohankumar urges people to remember that super is a long-term investment and that periods of short-term market weakness are inevitable along the way.
He also cautions people against knee-jerk reactions such as switching to lower-risk options or cash. “More often than not, that approach results in poorer long-term outcomes than if they stay the course. Not only do they crystallise their losses, but also risk missing part or all of the subsequent market rebound.”
While market falls are particularly uncomfortable for super members who are close to retirement, Mohankumar points out that many older Australians are likely to have money in the pension phase of super for 20 years or more, so their investment horizon is longer than they might think.
To put the current market fall in context, it’s important to remember that super funds have delivered strong returns for the previous three financial years, up 9.2% in 2023, 9.1% in 2024, and 10.4% in 2025. “Returns at those levels shouldn’t be expected every year, but importantly, super funds continue to deliver on their longer-term return and risk objectives,” says Mohankumar.
The table below shows the median performance to the end of January 2026 for the five traditional diversified risk categories.
Super fund performance (results to 28 February 2026)
| 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%) | 1.4 | 2.1 | 8.9 | 12.6 | 13.4 | 9.8 | 9.4 | 9.9 | 9.1 |
| High Growth (81–95%) | 1.1 | 2.0 | 7.4 | 10.6 | 11.5 | 9.1 | 9.1 | 9.5 | 8.9 |
| Growth (61–80%) | 1.1 | 1.8 | 6.5 | 9.4 | 9.9 | 7.7 | 7.5 | 8.0 | 7.7 |
| Balanced (41–60%) | 1.0 | 1.6 | 5.3 | 7.9 | 8.1 | 6.3 | 6.1 | 6.5 | 6.6 |
| Conservative (21–40%) | 0.8 | 1.3 | 4.0 | 6.0 | 6.4 | 4.6 | 4.4 | 4.7 | 5.1 |
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, a remarkably long positive run. And all risk categories have 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 9.3% or more per year over the past three calendar years, Mohankumar stresses that that level of return should not 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 6.8% per year, comfortably ahead of the typical objective.
Growth funds have produced positive returns in 28 of the past 33 financial years. 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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