Super fund performance over 31 financial years (to June 2023)

Super funds surpassed expectations in the financial year to June 2023. Against a backdrop of challenging economic conditions and high market volatility, the median Growth fund returned 9.2%, more than making up for the 3.3% fall the previous financial year.

The main drivers of the remarkable result were Australian and international shares, which returned 14.4% and 18.3% respectively over the year to June.

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.

“In the past four financial years, financial markets have dealt firstly with the challenges of the COVID crises, followed soon after by a period of rapidly rising inflation which central banks combatted by aggressively raising interest rate. (Super funds) have shown their ability to limit the damage when markets are weak but still capture substantial upside when markets perform strongly.  That’s evidenced by the median Growth fund returns of -0.6% in FY20, 18%  in FY21, -3.3% in FY23 and now 9.2% this past year.

Super fund performance: Financial years (1992–93 to 2022-23)

The table and chart below show the annual financial year performance of the median Growth fund over the 31 financial years since the introduction of compulsory super.

In the year to June 2023, the median Growth returned 9.2%, the 12^th positive return in 14 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 31. As it happens, they have had only five.

Financial year	Return (%)
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.

As you can see, all five risk categories posted positive returns in 2022-23, 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 31 years, Growth funds have returned 7.8% per year on average and the annual CPI increase is 2.7%, giving a real return of 5.1%, well above their 3.5% target.

Super fund performance (results to 30 June 2023)

Fund category (% growth assets)	1 yr (%)	2 yrs (% 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%)	12.4	3.4	10.8	7.5	9.2	9.4	7.2
High Growth (81–95%)	11.5	3.3	9.5	7.1	8.5	8.8	7.1
Growth (61–80%)	9.2	2.7	7.5	5.8	7.0	7.5	6.4
Balanced (41–60%)	6.9	2.2	5.4	4.6	5.4	6.0	5.6
Conservative (21–40%)	4.6	1.3	3.2	3.3	3.9	4.5	4.8

Source: Chant West. Performance is shown net of investment fees and tax, and before administration and adviser commissions.