Pension funds gave back some of August’s gain in September, with the median Growth fund (61% to 80% growth assets) down 0.4% for the month. That leaves pension Growth funds up 0.8% for the first three months of the 2026–27 financial year, in line with the 0.8% recorded by accumulation Growth funds over the same period.
Every risk category finished the month lower, from All Growth funds (96% to 100% growth assets), down 0.6%, to Conservative and High Growth funds, each down 0.5%.
Markets turned choppier in September. Rising bond yields, higher oil prices and persistent inflation weighed on both shares and bonds, with Australian shares down 2.4% and developed international shares down 0.7% in hedged terms. Australian bonds fell 0.9% and international bonds 1.7%.
Chant West head of superannuation investment research, Mano Mohankumar, says a weaker Australian dollar did most of the work limiting the damage.
“The Australian dollar played an important diversification role as it depreciated from US$0.72 to US$0.69 over the month,” he says. “That translated the 0.7% hedged loss on developed international shares into a solid gain of 1.9% in unhedged terms.”
Pension funds hold around 70% of their international shares unhedged on average, and emerging markets added 2.4% over the month. Unlisted assets also helped cushion the fall.
The table below shows median pension fund performance across various timeframes for five investment categories to the end of September 2026.
Pension fund performance (results to 30 September 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%) | -0.6 | 1.4 | 1.4 | 8.5 | 15.4 | 9.8 | 9.9 | 10.2 | 11.3 |
| High Growth (81–95%) | -0.5 | 1.2 | 1.2 | 7.6 | 13.0 | 8.6 | 9.6 | 10.0 | 10.8 |
| Growth (61–80%) | -0.4 | 0.8 | 0.8 | 7.2 | 11.0 | 7.2 | 7.8 | 8.5 | 9.4 |
| Balanced (41–60%) | -0.4 | 0.5 | 0.5 | 5.7 | 9.0 | 6.0 | 6.3 | 6.8 | 7.7 |
| Conservative (21–40%) | -0.5 | 0.1 | 0.1 | 4.1 | 7.0 | 4.4 | 4.6 | 4.9 | 5.9 |
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 30 September, pension Growth funds returned 9.4% per year, on average, while the accumulation equivalent returned 8.4%, 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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