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For the second year running, super funds surpassed expectations in the financial year to June 2024. Against a backdrop of challenging economic conditions and geopolitical tensions, with high market volatility, the median Growth fund returned 9.1%.
This followed the 9.2% return the previous financial year and represents the 13th positive return in the past 15 years.
Chant West senior research manager, Mano Mohankumar says the 2023 result is a reward for fund members who have remained patient and maintained a long-term focus.
Shares were the main driver of last year’s strong performance, with international shares up 21.5% on surging US technology stocks, while Australian shares were also up a healthy 11.9% led by the bank sector.
“With share markets performing so strongly … it’s not surprising that the better performing super funds generally had higher allocations to those asset classes,” says Chant West senior investment research manager Mano Mohankumar.
However, all asset classes had a good year, apart from unlisted property, which was hit by downward valuations in the office sector.
Fund members who held their nerve and maintained a long-term focus have been handsomely rewarded. In fact, over the past 15 years the median Growth fund has returned a healthy 7.2% per year, well above the typical return objective of 3.5% above inflation, or around 6% per year.
“If you think back two years ago, (financial year) 2023 kicked off amid surging inflation and uncertainty around when interest rate hikes might come to an end. At that time, I don’t think anyone could have forecast a 19% return over the subsequent two years and the small (financial year) 2022 loss of 3.3% now seems like a distant memory,” says Mohankumar.
Super fund performance: Financial years (1992–93 to 2023–24)
The table and chart below show the annual financial year performance of the median Growth fund over the 32 financial years since the introduction of compulsory super.
In the year to June 2024, the median Growth returned 9.1%, the 13th positive return in 15 years and well ahead of the typical long-term objective of around 6% per year. Growth funds typically aim to post no more than one negative return every five years, which translates to six negative years over the past 32. As it happens, they have had only five.
| Financial year | Return (%) |
|---|---|
| 2023–24 | 9.1% |
| 2022–23 | 9.2% |
| 2021–22 | -3.3% |
| 2020–21 | 18.0% |
| 2019–20 | -0.6% |
| 2018–19 | 7.0% |
| 2017–18 | 9.4% |
| 2016–17 | 10.8% |
| 2015–16 | 3.0% |
| 2014–15 | 9.8% |
| 2013–14 | 12.8% |
| 2012–13 | 15.6% |
| 2011–12 | 0.5% |
| 2010–11 | 9.2% |
| 2009–10 | 10.4% |
| 2008–09 | -12.9% |
| 2007–08 | -6.9% |
| 2006–07 | 15.6% |
| 2005–06 | 14.7% |
| 2004–05 | 13.1% |
| 2003–04 | 13.5% |
| 2002–03 | 0.3% |
| 2001–02 | -3.3% |
| 2000–01 | 6.0% |
| 1999–2000 | 12.7% |
| 1998–99 | 8.6% |
| 1997–98 | 10.0% |
| 1996–97 | 19.4% |
| 1995–96 | 10.7% |
| 1994–95 | 7.4% |
| 1993–94 | 7.1% |
| 1992–93 | 11.4% |
Source: Chant West. Performance is shown net of investment fees and tax, and before administration and adviser commissions.
The following table shows the super performance across various timeframes for five investment categories as at the end of the latest financial year.
Source: Chant West. Performance is shown net of investment fees and tax, and before administration and adviser commissions.
The following table shows the super performance across various timeframes for five investment categories as at the end of the latest financial year.
As you can see, all five risk categories posted positive returns in 2023–24, and returns were also positive across all timeframes from one to 15 years. All risk categories have also met their long-term return objectives, which typically range from CPI (a measure of inflation) +1.5% for Conservative funds and CPI+3.5% for Growth funds to CPI +4.25% for All Growth. Over the past 32 years, Growth funds have returned 7.9% per year on average and the annual CPI increase is 2.7%, giving a real return of 5.2%, well above their 3.5% target.
Super fund performance (results to 30 June 2024)
| Fund category (% growth assets) | 1 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%) | 12.7 | 6.1 | 8.3 | 9.0 | 9.1 | 9.6 |
| High Growth (81–95%) | 10.8 | 5.7 | 7.7 | 8.2 | 8.4 | 9.1 |
| Growth (61–80%) | 9.1 | 4.9 | 6.3 | 6.9 | 7.2 | 8.0 |
| Balanced (41–60%) | 7.4 | 3.9 | 4.8 | 5.4 | 5.8 | 6.7 |
| Conservative (21–40%) | 5.5 | 2.6 | 3.3 | 3.9 | 4.3 | 5.3 |
Source: Chant West. Performance is shown net of investment fees and tax, and before administration and adviser commissions.
Super fund performance: Calendar years (1993 to 2023)
For your reference, the table and chart below show the annual calendar year performance of the median Growth fund over the 31 years since the introduction of compulsory super.
Growth funds typically aim to post no more than one negative return every five years. As it happens, they have had only five negative years in the past 31, or one in every six years on average.
| Calendar year | Return (%) |
|---|---|
| 2023 | 9.9% |
| 2022 | -4.6% |
| 2021 | 13.4% |
| 2020 | 3.7% |
| 2019 | 14.7% |
| 2018 | 0.8% |
| 2017 | 10.8% |
| 2016 | 7.5% |
| 2015 | 5.7% |
| 2014 | 8.5% |
| 2013 | 17.2% |
| 2012 | 12.8% |
| 2011 | -1.9% |
| 2010 | 4.7% |
| 2009 | 15.1% |
| 2008 | -21.5% |
| 2007 | 8% |
| 2006 | 13.8% |
| 2005 | 14.3% |
| 2004 | 15.5% |
| 2003 | 9.2% |
| 2002 | -4.8% |
| 2001 | 4% |
| 2000 | 7.3% |
| 1999 | 10.2% |
| 1998 | 11% |
| 1997 | 14.9% |
| 1996 | 10.8% |
| 1995 | 16.1% |
| 1994 | -3.9% |
| 1993 | 23.9% |
Source: Chant West. Performance is shown net of investment fees and tax, and before administration and adviser commissions.
The following table shows the super performance across various timeframes for five investment categories as at the end of the last calendar year.
As you can see, all five traditional risk categories posted positive returns in 2023 and were overwhelmingly positive over three, five, seven, 10 and 15 years.
All risk categories have also met their long-term return objectives, which typically range from CPI (a measure of inflation) +1.75% per year for Conservative funds, to CPI +4.25% for All Growth funds. Over the past 31 years, the median Growth fund has returned 7.9% per year on average and the annual CPI increase is 2.7%, giving a real return of 5.2% – well above the typical return objective for Growth funds of CPI +3.5%.
Super fund performance (results to 31 December 2023)
| All Growth (96–100%) | 13.1 | 8.0 | 9.9 | 8.7 | 8.5 | 9.4 |
| High Growth (81–95%) | 11.4 | 7.1 | 8.9 | 8.1 | 8.1 | 8.7 |
| Growth (61–80%) | 9.9 | 5.9 | 7.3 | 6.9 | 7.0 | 7.8 |
| Balanced (41–60%) | 8.1 | 4.4 | 5.7 | 5.4 | 5.6 | 6.5 |
| Conservative (21–40%) | 6.2 | 3.1 | 4.0 | 4.0 | 4.4 | 5.3 |
Source: Chant West. Performance is shown net of investment fees and tax, and before administration and adviser commissions.
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