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Pension funds posted a solid return in August, with the median Growth fund (61% to 80% growth assets) up 0.9% for the month, taking the return for the first two months of the 2026–27 financial year to 1.2%.
Every risk category was in positive territory over the month, from All Growth funds (96% to 100% growth assets), up 1.1%, to Conservative funds (21% to 40% growth assets), up 0.4%.
Chant West head of superannuation investment research, Mano Mohankumar, says the healthy return for August was driven by domestic and global share markets, which together account for around 55% of a typical Growth portfolio.
“Despite some volatility towards the latter part of August, over the full month developed market international shares advanced 2.5% in hedged terms, led by the US,” Mohankumar says. “Markets were supported by strong corporate earnings, and the tech sector regained momentum after some AI-related companies had been sold down in July.”
A stronger Australian dollar cut that 2.5% hedged gain to 0.5% in unhedged terms, with pension funds holding around 70% of their international shares unhedged on average. Emerging markets also finished higher, returning 1.3%.
“Australian shares gained 1.6% over the month, which fell short of developed international markets but was still a solid result, with the resources sector leading the way and offsetting weaker performance from financials,” Mohankumar says. “In a volatile month for bond markets, performance was mixed, with Australian bonds down 0.2% and international bonds up slightly at 0.2%.”
The table below shows median pension fund performance across various timeframes for five investment categories to the end of August 2026.
Pension fund performance (results to 31 August 2026)
| Risk category (% growth assets) | 1 mth (%) | 3 mths (%) | FYTD (%) | 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%) | 1.1 | 3.6 | 1.4 | 11.2 | 14.5 | 9.3 | 10.3 | 10.3 | 11.0 |
| High Growth (81–95%) | 1.1 | 3.3 | 1.6 | 9.2 | 12.2 | 8.3 | 9.9 | 10.1 | 10.7 |
| Growth (61–80%) | 0.9 | 2.6 | 1.2 | 8.6 | 10.6 | 7.1 | 8.2 | 8.6 | 9.3 |
| Balanced (41–60%) | 0.7 | 2.2 | 0.9 | 7.0 | 8.6 | 5.9 | 6.5 | 6.8 | 7.7 |
| Conservative (21–40%) | 0.4 | 1.6 | 0.5 | 5.3 | 6.8 | 4.4 | 4.8 | 5.1 | 6.0 |
Source: Chant West. Performance is shown net of investment fees. It is before administration fees.
Tax-free returns
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, over the last 15 years to 31 August, pension Growth funds returned 9.3% per year, on average, while the accumulation equivalent returned 8.3%, a difference of 1.0%.
Conversely, when returns are negative, pension funds typically generate slightly bigger losses in the short term than accumulation funds in the same category. For example, in March 2026 the median return for pension Growth funds was -3.5%, compared with -3.2% for the accumulation equivalent.
Mohankumar says this is because accumulation funds get a deferred tax benefit when returns are negative.
Although people tend to be more risk averse as they get older, he says most retirees are still invested in their pension fund’s Growth option, where most 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 the 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.
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.
Over the long term, though, the advantage of holding a meaningful level of growth assets is clear.
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