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Pension funds made a modest start to the new financial year in July, with the median Growth fund (61% to 80% growth assets) up 0.3% for the month and 9.1% for the year to 31 July.
The month follows a strong 2025/26 financial year, when the median pension Growth fund returned 10.8%. Every risk category was in positive territory over July apart from Conservative funds (21% to 40% growth assets), which were flat.
Chant West head of superannuation investment research, Mano Mohankumar says share markets were mixed during July, with significant variation in returns across regions. Developed market international shares returned 0.2% in hedged terms, largely due to a flat month from US shares as the technology sector came under pressure amid concerns about the scale of AI investment and uncertainty about future revenue growth. The appreciation of the Australian dollar over the month turned that into a loss of 0.9% in unhedged terms, and funds hold about 70% of their international shares unhedged. Emerging markets declined 4.4%, as the previously strong performance from the technology sector in South Korea and Taiwan reversed sharply.
Australian shares went the other way. “Australian shares, on the other hand, were up a healthy 2.1% over the month supported by the financials and resources sectors, as well as the markets’ relatively low tech and AI-related exposure,” Mohankumar says. “Bonds weakened with Australian and international bonds falling 0.4% and 0.9%, respectively, as bond yields rose on renewed inflation concerns.”
Share markets have picked up since. With pension funds holding much the same underlying investments as accumulation funds, it is worth noting that Chant West estimates the median accumulation Growth fund is up 1.3% over the first seven weeks of the new financial year.
The table below shows median pension fund performance across various timeframes for five investment categories to the end of July 2026.
Pension fund performance (results to 31 July 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%) | 0.5 | 5.8 | 0.5 | 11.9 | 13.9 | 9.6 | 9.9 | 10.2 | 10.7 |
| High Growth (81–95%) | 0.5 | 4.7 | 0.5 | 9.8 | 11.6 | 8.6 | 9.5 | 9.9 | 10.3 |
| Growth (61–80%) | 0.3 | 4.1 | 0.3 | 9.1 | 10.1 | 7.1 | 7.8 | 8.4 | 9.0 |
| Balanced (41–60%) | 0.2 | 3.3 | 0.2 | 7.5 | 8.4 | 6.0 | 6.4 | 6.8 | 7.5 |
| Conservative (21–40%) | 0.0 | 2.4 | 0.0 | 5.8 | 6.6 | 4.4 | 4.7 | 5.0 | 5.8 |
Source: Chant West. Performance is shown net of investment fees. It is before administration fees.
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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 July, pension Growth funds returned 9.0% per year, on average, while the accumulation equivalent returned 8.1% – a difference of 0.9%.
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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